WEST VISAYAS STATE UNIVERSITY

COLLEGE OF BUSINESS AND MANAGEMENT

Iloilo City

FUNDAMENTAL DETERMINANTS INFLUENCING BUSINESS

ADMINISTRATION STUDENTS’ COFFEE

PURCHASING DECISIONS

A Research Proposal Presented to the

Faculty of the College of Business and Management

West Visayas State University

Iloilo City

In Partial Fulfillment

of the Requirements for the Degree

Bachelor of Science in Business Administration

Major in Operations Management

Melyn Rose C. Cabarles

Rhea Angela C. Cabristante

CJ Marie C. Cadenas

David King E. Deniola

2024
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Iloilo City

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Chapter 1

Introduction of the Study

This chapter presents the overview of the study and consists of five parts,

namely: Background and Theoretical Framework of the Study, Statement of the Problem

and Hypotheses, Significance of the Study, Definition of Terms, and Delimitation of the

Study.

Part One, Background and Theoretical Framework of the Study, presents a brief

rationale for the underlying reasons for conducting this study, as well as the theories

and concepts related to the problem.

Part Two, Statement of the Problem and Hypotheses, states the general

statement of the problem, the specific questions of the study, and the hypotheses.

Part Three, Significance of the Study, identifies who will benefit from the study

and the manner by which they may be able to benefit from the findings.

Part Four, Definition of Terms, defines conceptually and operationally the

important terms and the key variables used in this study.

Part Five, Delimitation of the Study, presents the scope and delimitation of the

study.

Background and Theoretical Framework of the Study

Coffee is one of the most widely consumed beverages in the world. In 2021 and

2022, nearly 176 million 60-kilogram bags of coffee were consumed worldwide. Coffee is

also fast becoming the beverage of choice among Filipinos. The Philippines, in fact, is

reported to be the second largest consumer of coffee in Asia, with 80 percent of

Filipinos drinking an average of 2.5 cups per day (Statista, 2023).

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Due to the growing demand and consumption of coffee in the Philippines, the

number of coffee shops built in cities and towns has grown rapidly offering various

flavors of coffee from hot to iced coffee. Coffee is becoming a popular drink not just for

adults but most especially for students.

As the coffee industry continues to evolve, understanding the factors that

influence consumer purchasing decisions has become increasingly important. Previous

research has explored various factors that influence consumer coffee purchasing

decisions. However, there is a lack of research specifically focused on the determinants

of coffee purchasing decision among West Visayas State University Business

Administration students. This study aims to address this gap by exploring the

fundamental determinants that influence Business Administration students' coffee

purchasing decisions to help coffee shop businesses enhance their product offerings and

marketing strategies to better meet the preferences and needs of their target

customers.

The study draws upon the Theory of Planned Behavior (TPB) by Ajzen (1991).

This theory predicts an individual's intention to engage in a behavior at a specific time

and place. It posits that individual behavior is driven by behavior intentions, where

behavior intentions are a function of three determinants: an individual’s attitude toward

behavior, subjective norms, and perceived behavioral control. Attitude toward behavior

refers to the degree to which a person has positive or negative feelings of the behavior

of interest. It entails a consideration of the outcomes of performing the behavior.

Subjective Norm refers to the belief about whether significant others think he or she will

perform the behavior. It relates to a person’s perception of the social environment

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Iloilo City

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surrounding the behavior. Perceived Behavioral Control refers to the individual’s

perception of the extent to which performance of the behavior is easy or difficult.

The conceptual framework, as illustrated in Figure 1, serves as the foundation of

the study. The antecedent variables, including personal factors such as sex, age, year

level, course major, and monthly family income, serve as personal indicators that may

influence consumer behavior. There are five independent variables including taste,

product design, ambiance, location accessibility, and price. The dependent variable is

the Business Administration students’ coffee purchasing decision, which may be

influenced by the antecedent and independent variables.

Figure 1 shows the conceptual framework of the study

ANTECEDENT VARIABLE INDEPENDENT VARIABLE DEPENDENT

VARIABLE
Fundamental
Determinants:
Personal Factors: • Taste
• Product design
 Sex • Ambiance Business
 Age • Location Administration
 Year Level accessibility Students’
 Course Major
• Price Coffee Purchasing
 Monthly Family Decision
Income

Figure 1. Students’ coffee purchasing decision as influenced by the fundamental

determinants and certain identified personal factors.

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Iloilo City

Statement of the Problem and the Hypothesis

This study aims to determine the fundamental determinants influencing coffee

purchasing decisions among Business Administration students.

Specifically, this study seeks to address the following questions:

1. What are the fundamental determinants influencing Business Administration

students’ coffee purchasing decisions? How do these determinants rank?

2. What is the level of influence of the fundamental determinants towards Business

Administration students’ coffee purchasing decisions when taken as an entire

group and classified according to sex, age, year level, course major, and family

income?

3. Are there significant differences in the level of influence of the fundamental

determinants towards Business Administration students’ coffee purchasing

decisions when classified according to sex, age, year level, course major, and

family income?

In view of the preceding problems, the following hypothesis is advanced:

1. Are there significant differences in the level of influence of the fundamental

determinants towards Business Administration students’ coffee purchasing

decisions when classified according to sex, age, year level, course major, and

family income?
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Iloilo City

Significance of the Study

This study identifies the fundamental determinants influencing Business

Administration students’ coffee purchasing decisions. It is intended to understand what

most influences the coffee purchasing decisions of business administration students

based on the five identified factors: taste, price, ambiance, location accessibility, and

product design.

The findings of the study might be beneficial to the following:

Coffee Shop Owners. The study findings can provide coffee shop owners a

valuable insight into the preferences and motivations driving coffee purchasing decisions

among students. Adjust menu offerings, pricing strategies, and store atmospheres to

attract and retain this customer segment.

Potential Coffee Shop Owners. This study offers insights into the preferences

and behaviors of potential customers, helping aspiring coffee shop owners tailor their

business plans to meet the needs of their target market. By understanding the factors

influencing coffee purchasing decisions among students, future café proprietors can

make informed decisions regarding menu offerings, pricing strategies, and store

atmospheres to attract and retain customers.

West Visayas State University Cooperative. The findings of the study may

benefit the West Visayas State University Cooperative (WVSU COOP) by providing
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insights into the preferences and decisions of Business Administration students

regarding coffee purchasing. This information can inform the cooperative's decisions

regarding their pricing strategies, and marketing efforts targeted at this student

demographic. Understanding the factors that influence students' coffee purchasing

decisions can help West Visayas State University Cooperative create a more appealing

and competitive coffee experience within the university community.

Students. This study will give individuals a deeper understanding of the factors

influencing their own purchasing decisions as well as those of their peers, which can be

applied to other consumer contexts beyond coffee.

Future Researchers. The study may pave the way for further research on

consumer decisions within the coffee industry or other consumer contexts. Provide a

basis for exploring additional factors, expanding the scope of analysis, or conducting

comparative studies across different demographic groups.

Definition of Terms

To better understand the study, the following terminologies were described

conceptually and operationally:

Business Administration students. This refers to individuals who are enrolled

in academic programs focused on the study of business management and

administration. Students who would like to learn the day-to-day operations of running a

business efficiently (Lattea, 2023).

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As used in this study, Business Administration students refers to individuals who

are currently enrolled in a Business Administration program in West Visayas State

University and who will serve as the target respondents of the study.

Coffee Purchasing Decision. This refers to the process of buying coffee

involves consumers making decisions on which products to choose by going through

different stages and processes (Tjiptono (2011).

As used in this study, the term coffee purchasing decision refers to the process

undertaken by Business Administration students when making choices about buying a

coffee. Considering factors such as taste preferences, pricing, location accessibility,

ambiance, and product design.

Fundamental Determinants. This refers to the core factors or variables that

significantly influence or shape a particular outcome, phenomenon, or system. These

determinants are considered fundamental because they have a profound and direct

impact on the overall behavior, functioning, or characteristics of the subject being

studied. Fundamental determinants can vary depending on the context, but they often

represent the underlying principles or key drivers that play a crucial role in

understanding and explaining a specific phenomenon or outcome (Ferson, 1997).

As used in this study, fundamental determinants are the key factors among taste

preferences, pricing, location accessibility, ambiance, and product design that have the

most significant impact on Business Administration students' coffee purchasing

decisions.
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Influencing. Influencing is a skill set where our behavior or approach is used to

change someone else’s thought process. (David, 2021)

As used in this study, influencing refers to the action or process exerting an

effect on the factors shaping Business Administration students’ coffee purchasing

decisions.

Scope and Delimitation

The study aims to determine which of the five identified factors has the most

influence on coffee purchasing decisions among Business Administration students. The

independent variables include taste preferences, price sensitivity, ambiance, location

accessibility, and product design; the dependent variables are coffee purchasing

decisions. In addition to this, the participants will be grouped according to their personal

factors specifically sex, year level, monthly family income. The respondents of the study

were the Business Administration students enrolled at West Visayas State University.

The sample size of the participants will be determined using the Slovin’s formula and

stratified random sampling will be utilized in selecting the sample.

This study will adapt a survey research design, a quantitative type of research

method, and employ a researcher-made survey questionnaire to gather data. Mean,

standard deviation, rank, t-test, and ANOVA will be used to statistically analyze the

collected data.
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Chapter 2

REVIEW OF RELATED LITERATURE

This chapter primarily outlines various studies and other researches from both

local and foreign literatures which have significant bearings on the variables included in

this study. This chapter contains the following topics: coffee purchasing decision, taste,

price, ambiance, location accessibility, and product design.

Coffee Purchasing Decision

In the study conducted by Be (2021), which focuses on the consumption

behavior of Café Amazon customers in Phnom Penh, Cambodia, several factors were

found to significantly influence their purchasing decisions. These factors include price,

service quality, brand image, product quality, and physical environment. However, it

should be noted that the importance of these factors may vary among consumers.

Coffee is widely considered a daily necessity among residents, particularly young

individuals, employees in the public and private sectors, and entrepreneurs. For these

individuals, coffee serves various purposes, such as refreshing their minds, relieving

stress from work or studies, providing a space for socialization and business

transactions, offering internet access, and stimulating creativity in areas like small and

medium-sized enterprises and government employment. While price and brand image

remain critical factors, other aspects may not strongly predict their consumption

behavior. Additionally, Café Amazon's widespread presence with multiple branches in

Phnom Penh serves as a convenience for customers, allowing them to easily access

locations near their workplaces, schools, hospitals, and other relevant areas.
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Additionally, according to Himawan and Rahadi (2020), the significant factors

affecting consumers' coffee purchasing decision include taste, product design, ambiance,

brand influence, location accessibility, price, willingness to pay, and consumer

preferences.

Purchasing decisions refer to the behaviors exhibited by consumers (decision-

making units) when acquiring and using goods and services. These decisions encompass

the processes and tasks involved in assessing, obtaining, and utilizing labor and

products. Numerous factors influence a shopper's purchasing choices, encompassing

psychological elements such as motivation, perception, learning, and memory. By

understanding consumer behavior throughout the purchasing decision cycle, marketers

can effectively promote and sell their offerings. These decisions arise from the complex

interplay of social, individual, and psychological variables. Products, which are goods

provided by businesses to customers, possess certain attributes that impact consumer

decision-making, such as quality, novelty, appealing appearance, and the sense of value

they instill in buyers. New and intricate products often require more time for a purchase

decision to be made. Marketers acknowledge this and aim to facilitate easy decision-

making through product offerings, value propositions, packaging, and branding. The

purchasing process begins when consumers recognize their needs or concerns and

subsequently contemplate various aspects, including the desired product, when, where,

and how to acquire it. Ultimately, consumers will choose to purchase a product if they

believe it can meet their needs, offers tangible benefits, or aligns with their desired

lifestyle (Pawit Jongnapasirikul & Suksod, 2019).

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The lifestyle of buyers is a crucial aspect that manufacturers must prioritize and

is one of the factors influencing purchasing decisions. The key point is that a buyer's

lifestyle encompasses product choices and daily consumption patterns. As the demand

for a certain lifestyle increases, the demand for associated products also rises. Setiadi,

as cited in Indrawati (2015), defines lifestyle as the collective way of life adopted by

individuals, which is shaped by their activities and the importance they assign to their

environment. AlDmour et al. (2017) explain that lifestyle encompasses how individuals

spend their time, what they deem significant in their surroundings, their self-perception,

their worldview, and essential attributes like life stage, income, education, and place of

residence. Lifestyle refers to the unique manner in which individuals live, and it can be

employed to analyze the lifestyles and adaptability of different social groups. By being

attentive to changes in the market's lifestyle, market participants can tailor their

business strategies to align with the desired lifestyle of their target audience. Consumers

sometimes make purchases based not only on their needs but also on their lifestyle

preferences.

According to Solomon (2006) and Blackwell et al. (2001), various factors shape

and influence consumer behavior. One such factor is the role of family, where

individuals tend to seek the input and influence of family members on their purchasing

decisions. Additionally, friends, reference groups, and wider societal influences also play

a significant role in shaping consumer behavior. These external influences can impact an

individual's preferences, choices, and attitudes towards products and services.

Moreover, consumer behavior theory seeks to explore and identify the different

variables that affect consumer behavior. Through comprehensive research, it strives to

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explain the intricate relationships between these variables and their impact on consumer

decision making. By examining the interactions between various factors, consumer

behavior theory aims to specify cause-and-effect outcomes, shedding light on why

consumers make certain choices and how they are influenced by different variables

(Kioumarsi et al., 2009; Massoud, Pham, & Ilham, 2014).

Siddiqui & Agarwal (2017) suggested that consumer behavior encompasses the

examination of how individuals, groups, or organizations go about selecting, acquiring,

using, and discarding products, services, experiences, or ideas to fulfill their needs and

desires. It delves into the social and economic consequences of consumer purchasing

and consumption behavior for both individuals and society at large. Consumer behavior

draws insights from psychology, sociology, social anthropology, marketing, and

economics, particularly behavioral economics. It explores the impact of emotions,

attitudes, and preferences on purchase decisions. Furthermore, it investigates various

factors such as demographics, personality traits, lifestyles, and behavioral variables like

usage rates, occasions, loyalty, brand advocacy, and willingness to make referrals. The

objective is to gain a deeper understanding of consumer desires and consumption

patterns through systematic studies. Additionally, the study examines the influence of

social groups, including family, friends, reference groups, sports, and society in general,

on consumer behavior. It encompasses the entire spectrum of purchasing behavior,

starting from pre-purchase activities and extending to post-purchase consumption and

evaluation processes. It also considers all individuals directly or indirectly involved in

purchasing decisions and consumption, encompassing brand influencers and opinion

leaders.
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Hanaysha (2018) suggests that in today's ever-changing and dynamic business

landscape, it has become crucial for retail managers to have a clear understanding of

how different types of consumers behave when purchasing various products and

services to meet their needs. To gain a competitive edge in the market, many retailers

have focused on creating positive brand perceptions in the minds of consumers to

influence their buying behavior (Shamsher, 2015). Consumer behavior revolves around

comprehending how individual consumers go through the purchase decision process and

utilize their available resources, such as time, money, and effort, to acquire a product or

service (Schiffman and Kanuk, 2007). Therefore, retail managers should possess

knowledge about consumer characteristics and preferences as these factors significantly

impact purchase decisions. This information can empower managers to enhance their

competitiveness and ensure long-term survival. The consumer decision-making process

comprises different stages that consumers pass through before making a final purchase

decision. Marketers should focus on the entire purchasing process rather than solely

emphasizing the purchase decision because consumers go through various phases

before reaching a conclusion (Basil et al., 2013). Understanding buyer behavior is

challenging as several factors can influence consumer behavior preceding a purchase

decision. In some cases, consumers may spend less time contemplating the purchase of

low- or high-value products because they prioritize fulfilling their needs. This has

prompted marketing managers to adopt strategies that motivate consumers to choose

their offerings by developing an effective marketing plan. Previous research has

indicated that corporate social responsibility (Elg and Hultman, 2016) and social media

marketing (Duffett, 2015) have substantial impacts on shaping a consumer's purchasing

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behavior and their attitude towards a brand. Additionally, scholars have recognized the

significance of factors such as store atmosphere (Hosseini et al., 2014), perceived value,

and sales promotion (Andreti et al., 2013) as influential predictors of consumer behavior

and brand preference.

According to Kotler & Armstrong (2010), consumer buying behavior is largely

impacted by diverse factors such as cultural, social, personal and psychological. By

analyzing the past buying patterns of consumers, marketers can gauge their future

purchasing decisions. Considering this, consumer behavior is an integral aspect of

human behavior that explores the social factors that impact consumer behavior.

Consumer behavior is greatly impacted by social factors, which play a substantial

role in shaping individuals' purchasing decisions. The influence of other people on an

individual's buying behavior cannot be underestimated. Key social factors include

reference groups, family, as well as an individual's role and status within their social

circles (Perreau, 2014). Consumers' self-image and behavior are influenced by their

reference group, which provides a basis for comparison regarding lifestyle, habits, and

behavior. These reference groups can be made up of various individuals, such as family,

close friends, neighbors, work colleagues, and other associates. Additionally, there may

be groups from which consumers do not belong yet aspire to join, known as aspirational

groups. Such groups represent a consumer's future desires and aspirations (Kotler &

Armstrong 2010, p. 164; Khan 2006, p. 58). The buying behavior of individuals can be

influenced by family members. The family environment provides an opportunity for

individuals to acquire values and develop their personality, shaping their attitudes and

opinions toward various subjects, such as social relations, society, and politics. Families
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also shape consumers' brand perceptions and habits, ultimately affecting their

purchasing decisions. For instance, consumers who formed brand perceptions during

their youth may continue to make the same brand selections in adulthood, influenced by

their family without even realizing it (Kotler & Armstrong 2010, p. 169; Khan 2006, p.

68). Individuals have various roles in their lives, each defined by specific activities and

attitudes expected by those around them. These roles are influenced by the social

context and relationships. Social status, which is determined by factors like wealth,

education, and occupation, reflects the position an individual holds within social groups.

In many societies, status is highly valued, and individuals seek the admiration of others.

Furthermore, product and brand choices often reflect an individual's social role and

status, as they aim to align with their desired image or societal expectations. Acquiring

social status can be achieved through personal success or being born into a privileged

background (Kotler & Armstrong 2010, p. 170; Wright 200, p. 360).

The decisions made by an individual are impacted by personal factors, including

their age, current stage in the life cycle, occupation, economic situation, lifestyle,

personality, and self-concept. These aspects of an individual's life play a significant role

in shaping their choices and preferences. Consumers undergo changes throughout their

lives, and their purchasing behavior and product preferences are influenced by their age

and life stage. Age-related factors, such as preferences in food, clothing, recreation, and

furniture, play a role in shaping their buying decisions. Additionally, environmental

factors, values, lifestyle, hobbies, and consumer habits evolve over time. The purchasing

behavior and brand choices of consumers are also influenced by their family life stages.

While traditional family life cycles used to primarily include young singles and married
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couples with children, marketers now recognize and cater to nontraditional stages such

as unmarried couples, childless couples, same-sex couples, single parents, and

individuals marrying later in life (Kotler & Armstrong 2010, p. 170). These changes in life

stages and preferences can impact the selection of coffee brands at different points in a

consumer's life. Moreover, a consumer's occupation and purchasing power play a

significant role in shaping their purchasing decisions and behavior. The level of income

directly impacts the affordability of products and influences one's perspective towards

money. Individuals with similar occupations often share similar preferences in areas

such as music, clothing, and leisure activities. They tend to socialize with each other and

share similar values and ideas. The income level also determines what individuals can

afford and influences their outlook on money (Solomon 2004, p. 12). Consumers from

lower income groups may prioritize purchasing essential products for survival rather

than spending on luxury brands or designer clothes. Consumers' lifestyle reflects their

manner of living and expenditure. It is shaped by their previous experiences, current

circumstances, and inherent characteristics. The choices consumers make when

purchasing products are intricately linked to their lifestyle. An individual's lifestyle

comprises various dimensions. Firstly, activities depict how consumers utilize their time,

such as work, hobbies, or vacations. Secondly, interests encompass their preferences

and priorities, such as family, home, or food. Lastly, opinions showcase their sentiments

on diverse matters, including self-perception, politics, or products. These lifestyle

dimensions collectively embody a person's way of life. Notably, lifestyle significantly

influences consumers' buying behavior and decisions. Additionality, personality sets

individuals apart from one another through their unique traits. These personal traits,
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such as self-confidence, adaptability, sociability, and dominance, differentiate individuals

(Kotler & Armstrong 2010, p. 172). Personality plays a role in shaping our self-

perception and how we perceive the world around us, as well as how others perceive

us. Our attitudes, values, and the people we interact with contribute to the development

of our personality. As we grow and change environments, our personality can undergo

alterations (Wright 2006, p. 296). Self-concept is a complex and multidimensional

concept. Kardes et al. (2011) define self-concept as "the totality of an individual's

thoughts and feelings about themselves as an object." In other words, it is the image

people have of themselves, formed by their attitudes and beliefs. Many brands have

successfully cultivated an image and personality that align with consumers' values and

traits. This enables consumers to express themselves through their brand choices

(Kardes et al. 2011, p. 230). The dimensions of brand personality include sincerity,

excitement, competence, sophistication, and ruggedness.

Taste

Taste is crucial for the sensory evaluation of food. This sense allows the

detection of essential nutrients and toxic compounds. Human beings are able to

discriminate five primary different taste qualities: sweet, umami (the taste of amino

acids), bitter, salty, and sour. Tasting compounds are remarkably diverse chemically.

They activate specialized detectors expressed in the oral cavity (Briand & Salles, 2016).

According to Liem & Russell (2019) emphasizes the significance of taste in food

selection and highlights the need for a deeper understanding of the connections

between food taste, individual taste preferences, food choices, and dietary intake. By

comprehending these links, we can gain insights into why some individuals opt for and
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consume unhealthy foods. While overall food liking, which includes taste, smell, and

appearance, greatly influences food choices, it is challenging to establish a direct

correlation between adults' long-term food choices and their liking for specific basic

taste qualities. This difficulty might arise from methodological limitations wherein basic

taste qualities are often assessed in isolation, rather than considering their natural

occurrence in food. Additionally, taste preferences may play distinct roles across

different stages of life. Exploring these aspects can provide valuable insights into the

complex factors influencing food choices and contribute to promoting healthier eating

behaviors.

Sensory pleasures from the taste of foods is a major determinant of food intake:

Foods that satisfy the taste (via flavor, texture, mouth feel, sensory perception) may

contribute not only to greater eating experience, but also to a sense of satiation and

satiety. The sense of taste is one of the most important human senses. Senses of taste

allow us to separate undesirable foods from those that are nutritious. It is also strongly

tied to primitive emotional and behavioral functions of our nervous system. Taste

defines our ingestion of foods, beverages and medications. Additionally, taste preference

refers to whether a person will choose a certain type of food in preference to others,

and he/she uses this to help control the type of diet eaten. (The Science of Taste &

Nutrition, 2022).

However, according to a study by Sousa, et.al (2016), it was stated that the

most cited reasons for not consuming coffee were that consumers ‘not liking’ the taste

and/or aroma of the coffee. Customers will be willing to purchase the product that

tasted better according to their perception.

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Price

Price is the value or money customers give up in exchange for a particular

offering that would serve to satisfy their needs and wants. In simple terms, a price is

the measure of the value a customer exchanges to purchase an offering. Prices serve as

an economic mechanism using which offerings can be distributed among customers in

the marketplace. They also act as indicators of the extent to which an offering is

demanded and also the extent to which it is supplied or available. The price of a product

is the overall value of the offering, including the value of all raw materials and service

that went into making an offering (Kamble, 2023).

As stated by Bottrell (2023), pricing plays a significant role in shaping customers’

perceptions of a product or service. A solid business pricing strategy helps a company

establish the desired image of its offerings in the eyes of its target audience. For

instance, premium pricing can convey exclusivity and high quality, while value pricing

can communicate affordability and accessibility. By carefully considering the target

market’s expectations and preferences, a business can set a price that effectively

communicates the product’s value proposition, resulting in a strong and favorable brand

perception. A well-crafted pricing strategy can also help a business foster customer

loyalty. By offering fair and competitive prices, a company demonstrates that it values

its customers and wants to provide them with the best possible products and services.

This can lead to increased customer satisfaction and repeat business, which ultimately

contributes to long-term profitability and success. Moreover, a business can use pricing

strategies such as loyalty programs and volume discounts to incentivize repeat

purchases and further strengthen customer relationships.

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The impact of pricing on consumer behavior is widely acknowledged, as higher

product prices tend to result in lower sales volume, while products priced below the

market rate are expected to sell in higher quantities (Sadiq M. W. et al., 2020).

Numerous studies have demonstrated the crucial role of pricing in consumer purchasing

behavior (Huo et al., 2021). Price serves as a more noticeable heuristic cue than quality

(Yoon, Oh, Song, Kim, & Kim, 2014). Wijaya (2011) defines price as the monetary

amount customers pay to obtain product benefits. Reasonable pricing enhances

customer value (Lee, 2013) and can positively influence consumers' purchase decisions

(Jiani, 2017) (Jang, 2007). When the perceived benefits align with the offered price,

consumers are more likely to make purchase decisions. Recent studies in the retail

industry indicate that lower sale prices significantly boost consumer purchases (Yoon et

al., 2014). These findings support the concept of a direct effect, where perceived price

influences perceived value and purchasing decisions (Lien, Wen, Huang, & Wu, 2015).

Additionally, prices hold a direct positive impact on purchasing decisions made by

consumers (Mulya Firdausy & Idawati, 2017). Price plays a primary role in consumers'

choices to make a purchase or not, though brand image also influences the connection

between price and purchase decisions.

Price has been considered as one of the foremost essential factors that influence

the behavior of both companies and customers. Himawan and Rahadi (2020), reported

that consumers' perceived fairness of price has the primary effect on their purchasing

choices. It is revealed that customers always had their budgets in mind before making a

purchase of coffee in coffee shops.

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The idea presented suggests that the price of coffee holds substantial influence

over consumer purchasing decisions at coffee shops. According to Cahya et al. (2021),

consumers weigh the price factor significantly when making choices regarding coffee

purchases. This aligns with the findings of Harahap et al. (2022), who note that

consumers consider price to be one of the key factors that shape their purchasing

behavior. The implication is that the affordability and perceived value for money of

coffee have a direct impact on consumers' decision-making process when selecting their

preferred beverage at coffee shops. As such, coffee shop owners and marketers should

be mindful of pricing strategies to attract and retain customers while considering their

price sensitivity and preferences. Additionally, in the study conducted by Puspitasari &

Hasanudin (2022), it shows that price influences consumer demand or has a positive

effect on their coffee purchasing decisions. The results show that if the price of the

coffee is reasonable and in its best quality, more people will likely purchase it. Thus, the

study’s findings show that the customers attribute a product’s high price often as having

excellent quality. Therefore, pricing can be used as a criterion of interest.

Ambiance

According to Berman & Chatterjee (2021), the store atmosphere or ambiance

encompasses various elements such as services, music, uniforms, and product care,

among others. These elements are strategically designed to attract consumers and

stimulate their desire to make a purchase. By creating an appealing and engaging

environment, businesses can shape customer perceptions and influence their buying

behavior. Further emphasizing the importance of store atmosphere, Kotler & Armstrong

(2017) state that it is an essential aspect of a store's product arsenal. Each store
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possesses a physical layout that is carefully planned to facilitate smooth and effortless

movement for customers. The layout contributes to the overall convenience and comfort

experienced by customers while navigating the store. Additionally, store ambiance,

which encompasses both the interior layout (in-store) and outdoor space (out-store),

plays a crucial role in enhancing the convenience and satisfaction of customers (Paila,

Kalangi, & Rogahang, 2018).

According to Levi & Weitz (2012), there are several indicators used to measure

store atmosphere or ambiance. It includes an in-store atmosphere store, or indoor

setting, and an out-store atmosphere store, or outdoor setting. In an indoor setting, it is

composed of internal layout, sound, odor, indoor texture, and interior design. Internal

layout consists of the layout of the visitor table, cashier table, lights, air conditioning,

and sound. Sound is presented in the room to create a relaxing impression, which

consists of a sound system. Odors are odors emitted by air fresheners. The texture is

the physical appearance used for tables and chairs. And design the interior arrangement

of the room, following the space for visitors and roads that provide comfort. On the

other hand, an outdoor setting is composed of external layouts, outdoor texture and

exterior design. External layouts arrangement of the layout of various facilities which

include the location of visitor parking, the layout of the signboard, and the location.

Textures include outdoor building wall textures and outdoor sign board textures. And

the exterior design includes the design of outdoor signboards, the placement of

entrances, the shape of the building seen from the outside, and the outdoor lighting

system.
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In order to remain competitive and attract customers, a pleasing atmosphere

must be created through the shop’s layout, decoration, and other features. Customers

feel more comfortable when their environment is well organized, inviting, and consistent

with the brand identity of all elements within the scope of proper coffee shop design.

Furthermore, customers who feel safe within a space will likely return again in the future

and recommend it to others as well. Coffee shop design plays an important role in

marketing, and creating an inviting atmosphere is key. Maximizing the space of a coffee

shop can help create that feeling of comfort for patrons. By taking into account how

customers will use the area and what items need to be available, it’s possible to make

sure all areas are utilized effectively. Incorporating texture into the shop’s decor also

helps set a tone that welcomes customers in. Utilizing different textures such as wood

furniture, tile floors, or patterned fabric on chairs can give guests something interesting

to look at while they wait for their order. It also creates visual interest which keeps

people engaged when entering the store or sitting down to enjoy their drink (Wilson,

2023).

In the study conducted by Githiri (2016), examining the influence of physical

environment on customers’ satisfaction and return intention in both Nairobi and Coastal

region of Kenya. The physical environment was measured including the external

appearance of the restaurant, interior scheme of restaurant, temperature of the dining

area, music background, lighting in the dining area, type of linen, type of furnishing,

signs of smoking zone area and arrangement of chairs and tables. It was found out that

most respondents were dissatisfied with the external appearance of the restaurant. The

exterior of the restaurant provides the first impression to the customer. Most restaurants
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especially in Nairobi were located in the city center between old commercial buildings

with limited or no parking area. This could have been one reason why the respondents

were dissatisfied with the external appearance. Additionally, it was also indicated that

the majority of the respondents were dissatisfied with the musical background. This

implies that the music played in the restaurants did not fit or match with the majority of

the respondents’ taste causing dissatisfaction. Different respondents have different

preferences in terms of the kind of music they listen to. Respondents who prefer music

with slower tempo would be dissatisfied if the background music has a fast tempo and

vice versa. The respondents were however satisfied with the rest of the dimensions in

the physical environment. The study suggests that higher levels of physical environment

quality were associated with higher levels of return intention. The findings of the study

imply that when customers felt satisfied with the physical environment, they were more

likely to have higher return intention. Hence the physical environment influenced

customers' return intention in rated restaurants.

Location Accessibility

The location of a business is a crucial factor that significantly impacts its

operations and overall success. As stated by Admadanu (2017), location refers to the

physical space where a company operates or carries out its activities to produce

economically important goods and services. This holds true for various industries,

including the coffee shop business. Accessibility is one of the critical factors that

determine the potential development of a location. It is influenced by the transport

system and land-use patterns in a particular area. In the context of a coffee shop, the
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location's accessibility is a crucial factor as it can significantly impact business

performance.

According to Oppong (2023), location plays a critical role in the success of a

business. It is one of the key factors that can determine the profitability and viability of

a business venture. A well-researched location can be a powerful catalyst for growth. A

great location in business fosters customer engagement, attracts top talent, and

streamlines business operations. Conversely, a bad location can hinder a business

growth, limiting its reach and diminishing its overall appeal. The importance of location

in business cannot be overemphasized. Location can also influence a business’s ability to

market itself, the competition it faces from businesses, the total cost of operation, taxes

the business owner has to pay and the regulations they must follow. Choosing the right

location allows businesses to be easily accessible to their target market. Proximity to

potential customers increases the likelihood of attracting and retaining customers. If the

business is conveniently located at the best place to attract customers, it can be certain

of growth, an increase in sales, and brand visibility.

One of the dimensions of brand equity is brand loyalty, which is influenced by

the location of the restaurant or coffee shop. In the study by Wang, Tran, and Nguyen

(2014), the researchers found that the location of a restaurant or coffee shop has a

positive effect on brand loyalty. This implies that consumers are more likely to be loyal

to a brand if it is conveniently located, accessible and easy to reach.

In the study conducted by Puspitasari & Hasanudin (2022), the findings show that the

demand for coffee is significantly influenced by location. Accordingly, when choosing a

location, it requires thinking about its accessibility. By considering this element,

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consumer’s tendency to make a purchase evidently shows an inclination to its nearness

and tangibility. The access or nearness to the location is the main reason some

consumers visit and purchase coffee (Bura, et.al (2023). It was stated that proximity to

the offices, such as government offices, and the market most likely to influence

purchasing decisions.

Thus, to ensure that coffee shops are located in good areas, it is important to

consider geographic, demographic, and psychographic factors. These factors may

change over time, and it is important for businesses to stay aware of those changes as

they may influence the location's attractiveness. According to past studies, the choice of

location has a positive impact on brand equity, which refers to the value of a brand in

the consumer's mind (Wang, Tran, and Nguyen, 2014).

Product Design

Product design plays a significant role in the development of new products. It

encompasses the process of generating and refining ideas to create innovative and

appealing products. In the context of a coffee shop, product design involves how the

coffee is conceptualized and prepared by the coffee maker, such as the skilled barista,

and how it is presented to the customers.

Product design forms a crucial part of a brand's identity and plays a vital role in

driving brand equity. From a branding perspective, product design is a powerful tool for

differentiating the brand, enhancing value for both the consumer and the firm, driving

consumer preferences and establishing a sustainable competitive edge. Moreover,

studies have demonstrated that investing in innovative product design can provide

superior customer value and help firms perform better in the market. This highlights the
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importance of product design research for brand managers and researchers. The

research aims to explore the emotional effects of product-level design features on

brand-level outcomes, as highlighted by Kumar, Townsend, and Vorhies (2014). The

outcome of such research will enable firms to tailor their product designs to create

positive brand-level outcomes, setting themselves apart from their competitors and

reinforcing their value proposition.

According to Babich (2018), product design involves identifying market

opportunities, clearly defining the problem at hand, developing appropriate solutions,

and validating those solutions through user feedback. Notably, one of the most

significant elements of the product design process occurs even before the actual design

work begins. It is essential to understand the context in which the product will exist.

During this pre-design phase, the product team must establish a clear product vision

and strategy. A product vision sets the direction and guides the development team

throughout the project. It encapsulates the core essence of the product, providing

indispensable information necessary for the successful development and launch of the

product. Moreover, a well-defined vision helps in delineating what the business should

not focus on building, thus ensuring focus and clarity during the product creation

process. By establishing boundaries and staying aligned with the vision, the product

team can craft a product that aligns with the strategic objectives and ultimately

resonates with the target market.

Product design serves as the initial point of contact between a product and

potential buyers, whether in physical retail aisles or through online search results. This

recognition has led both researchers and business practitioners to acknowledge the
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significant role of product design in influencing consumer and buyer behavior.

Consequently, product design and its impact on buyer behavior have become subjects of

great interest in academic and business circles. Studies in this field, including those

referenced in the idea (Giese et al., 2014; Rosa et al., 2014), highlight the importance of

product design as it forms the first impression for buyers when they encounter products

through online searches, advertisements, or when browsing retail aisles. Although there

exists a growing body of empirical evidence showcasing that consumers value certain

designs more than others, little is known about how buyers interpret product designs

and transform them into perceptions of value when making consumption decisions.

Therefore, further research is needed to gain deeper insights into how product designs

are perceived by buyers and how these perceptions ultimately shape their evaluation of

value in various consumption situations. Such understanding will provide valuable

insights for businesses to optimize their product designs and effectively cater to

consumer needs and preferences.

There are many factors to consider while designing a successful product, and

design characteristics are essential for the product’s smooth operation. Everything from

high-end office furniture to intuitive software relies on excellent design. Products are

designed when their creators imagine, create, and refine them with the goal of

satisfying a target market’s wants and needs. The goal of product design is to develop

something novel for commercial sale. It entails a range of strategic and operational

actions to create and market new concepts. Product designers systematically conceive

creative concepts, assess their feasibility, and ultimately create usable goods. The

process of designing and developing a product requires thinking outside the box, the
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development of prototypes, and iterative testing. The market-specific problems that

these goods are meant to fix are articulated with the help of customers (Pandya, 2023).

According to Zampollo et al. (2011), various aspects of product design, including color,

components, texture, shape, and arrangement, must work harmoniously to create an

aesthetically pleasing and satisfying experience for customers. A well-designed product

enhances the overall experience and can differentiate a coffee shop from its

competitors.

In a highly competitive market environment, where coffee shops often face

intense competition, it becomes crucial for them to differentiate their products and

services from others (Lee & Yeu, 2010). Creating distinctive and visually appealing

products helps to capture attention, create a positive impression, and set the coffee

shop apart from its competitors. It allows the coffee shop to establish a strong and

memorable identity in the minds of consumers.

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Chapter 3

RESEARCH DESIGN AND METHODOLOGY

Chapter Three contains three parts: Purpose of the study and Research Design,

Method, and Data Analysis Procedure.

Part One, Purpose of the study and Research Design, narrates the purpose of the

study and expounds the research design that will be used.

Part Two, Method, narrates how the participants will be selected, describes the

research instrument that will be utilized in gathering of data, the validity of the

instrument, and how the instrument will be administered and gathered.

Part Three, Data Analysis Procedure, presents the statistical tools that will be

used in analyzing the collected data.

Purpose of the Study and Research Design

Purpose of the study. This study aims to determine the fundamental

determinants influencing coffee purchasing decisions among Business Administration

students.

Research Design. This study will use a quantitative approach.

Quantitative research is the process of collecting and analyzing numerical data to

describe, predict, or control variables of interest. This type of research helps in

testing the causal relationships between variables, making predictions, and

generalizing results to wider populations. Quantitative data analysis is used when

researchers are interested in understanding data sets over time to identify

patterns (Sreekumar, 2024). According to Jose (2021), the quantitative approach

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to research ensures that the data gathered is accurate and reliable because it is in

numerical form. This characteristic also provides a wider scope to analyze the data.

The study will utilize a survey method to gather data. A survey is the most

popular kind of quantitative research to gather data from a wider audience across

multiple sources. It is versatile in nature, allowing it to evaluate and gather data for

various objectives across multiple industries. This quantitative research design provides

respondents with anonymity and confidentiality, encouraging honest responses (Jose,

2021). This approach allows for the systematic collection of data from Business

Administration students to explore the fundamental determinants influencing their coffee

purchasing decisions.

Research Method

Participants. The participants of the study will be the undergraduate Business

Administration Students enrolled at West Visayas State University. The target population

includes students from various academic years and program concentrations within the

Business Administration department, specifically from Operations Management and

Financial Management. A random sample of students will be selected to participate in

the survey, ensuring representation across the demographic groups.

The researchers will utilize the Slovin’s formula, with five percent (5%) as

margin of error in determining the sample size of the participants, whereas

stratified random sampling will be applied in selecting the sample. This sampling

method ensures that participants are selected from different strata or subgroups

within the population of Business Administration students, such as different

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academic years and course majors. By using stratified random sampling, the

researchers can ensure that each subgroup is adequately represented in the

sample, allowing for more accurate analysis and generalization of the findings to

the entire population.

The solution below shows how the researchers will come up with sample

size:

n = N/1+ Ne2

Where:

N = total population

e = allowable error

Determination of Sample Size (n)

Table 1 shows the distribution of participants in different categories.

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Table 1

Distribution of Participants

Category f %
A. Entire Group
B. Sex
Female
Male
C. Age
18 years old and below
19 to 21 years old
20 to 24 years old
25 years old and above
D. Year Level
First Year
Second Year
Third Year
E. Course Major
Financial Management
Operations Management
F. Monthly Family
Income
Php 20,000 and below
Php 20,001 - Php 60,000
Above Php 60,000

Data gathering instrument. The primary data gathering instrument to be used for

this study is a researcher-made survey questionnaire. The questionnaire will consist of

questions designed to assess Business Administration students' coffee purchasing

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decisions and preferences related to the identified factors such as taste, price,

ambiance, location accessibility, and product design.

The survey-questionnaire will consist of three parts. Part one (1) contains the

demographic profile that the respondents are required to fill in their personal

information, including their name, which is optional, age, sex, year level, course major

and monthly family income. Part two (2) of the survey questionnaire will be composed

by the aspect of the coffee consumption including frequency of coffee consumption,

preferred coffee products, and coffee consumption patterns. Part three (3) will consist of

items to identify and rate the fundamental determinants influencing coffee purchasing

decisions. This instrument will be designed in a manner allowing respondents to answer

with various options or scales to gain a better understanding of their attitudes and

perceptions towards the problem of the study.

This study will employ a five-point Likert Scale to measure and rate the

respondent’s level of agreement towards the items in Part two. The five categories of

the Likert Scale and Interpretations are shown below:

Scale Interpretation

5 Strongly Agree

4 Agree

3 Neutral
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2 Disagree

1 Strongly Disagree

To interpret the respondent’s scores, the researchers will utilize the following mean

scale and interpretations:

Mean Scores Interpretations

4.21.50 - 5.00 Very high influence

3.41 - 4.20 High influence

2.61 - 3.40 Moderate influence

1.81 - 2.60 Low influence

1.00 - 1.80 No influence at all

Validity of Instrument. The survey-questionnaire will be subjected to content-face

validation by three persons: two (2) research advisers from the College of Business and

Management and one (1) research adviser outside of the University. They will evaluate

the items and check whether they were relevant or irrelevant to the study, and if the

items needed revision.

Procedure. First, the researcher will structure a survey-questionnaire and let the

evaluators evaluate the data gathering instruments.

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Next, a letter to conduct the study, signed by the researchers and the research

adviser, will be prepared and addressed to the Dean of the College of Business and

Management. Once the letter is approved, the researchers will obtain permission from

the participants to conduct the study. Participants will be briefed about the purpose of

the study and provided with information about their rights and confidentiality. The

questionnaire will be distributed to selected participants either electronically or in-

person, depending on logistical considerations. Participants will be given sufficient time

to complete the questionnaire.

Once completed, the questionnaires will be collected either electronically or

physically, ensuring the confidentiality of responses. The researchers will also check if all

the data collected were answered completely and therefore, eligible to be used in the

study.

Finally, the collected data will be tallied, encoded and prepared for statistical

analysis. It will be sent to the statistician for further analysis. The results will be

summarized, analyzed, interpreted, and described.

Data Analysis Procedure

The data gathered will be analyzed through the following descriptive and

inferential statistical tools. The descriptive statistical tools will be utilized to analyze,

summarize, and describe the demographic profile of the respondents and the results of

the study. On the other hand, inferential statistical tools will be employed to analyze,

test the differences and relationship among variables, interpret, and draw inferences
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and conclusions from the results. These analyses will help identify significant predictors

of coffee purchasing decisions among Business Administration students.

The statistical tools to be used are the following:

Mean. The mean is the most common measure of central tendency. It is the

average level observed in the collected data. This will be used to calculate the average

rating or score for each factor among the survey respondents. This will help to

understand the central tendency or typical value of each factor. A higher mean score

indicates that the factor is considered more important in coffee purchasing decisions,

while a lower mean score suggests lesser importance.

Standard deviation. The standard deviation measures the dispersion or spread

of the data points around the mean. The standard deviation will indicate the variability

in responses for each factor among Business Administration students. A larger standard

deviation implies greater variability, indicating that opinions on a particular factor vary

widely among students and a smaller standard deviation suggests more consistent

opinions among respondents.

Rank. Ranking is a statistical technique used to order or rank data points based

on their value or score. Ranking will be used to determine the relative importance of

each factor influencing coffee purchasing decisions among Business Administration

students.

T-test. The t-test is a statistical test used to determine whether there is a

significant difference between the means of two groups. A t-test may be utilized to
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compare the mean ratings of coffee purchasing decisions between different

demographic groups of Business Administration. This analysis can help identify whether

there are statistically significant differences in coffee purchasing decisions based on

various student characteristics.

Analysis of Variance (ANOVA). ANOVA is a statistical tool that examines the

differences in the means of multiple groups. ANOVA will be used to determine whether

there are significant differences in coffee purchasing decisions among Business

Administration students based on the five factors: taste, price, ambiance, location

accessibility, and product design. This will also help to assess whether there are

statistically significant differences in mean ratings for each factor across different groups

of students (e.g., age, sex, different year levels, course major or income brackets).
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Data Gathering Instrument

To the Respondents:

Greetings!

The undersigned are currently conducting a research study entitled

Fundamental Determinants Influencing Business Administration Students’

Coffee Purchasing Decisions. This is part of the requirements in the Business

Research course under the Bachelor of Science in Business Administration major in

Operations Management program at West Visayas State University. In relation to this,

we would like to administer a survey to assess the fundamental determinants influencing

Business Administration students’ coffee purchasing decisions.

Please complete this survey questionnaire by answering all questions as honestly

as possible. Rest assured that the information gathered will be treated with the utmost

confidentiality and will be used solely for the purpose of the study. Thank you very

much for your cooperation.

Sincerely yours,

(Sgd.) CABARLES, MELYN ROSE C.

(Sgd.) CABRISTANTE, RHEA ANGELA C.
(Sgd.) CADENAS, CJ MARIE C.
(Sgd.) DENIOLA, DAVID KING E.
Researchers

Noted by:
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ROSEMARIE M. DICHOSA, PhD.
Adviser
I. Personal Information

Instructions: Check the box that corresponds to your answer.

Name (Optional):

Sex:

o Male

o Female
Age:

o 18 years old and below

o 19 to 21 years old

o 20 to 24 years old

o 25 years old and above

Year Level:

o First Year

o Second Year
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o Third Year
Course Major

o Financial Management

o Operations Management

Monthly Family Income:

o Php 20,000 and below

o Php 20,001 - Php 60,000

o Above Php 60,000

II. Aspects of coffee consumption

1. Frequency of Coffee Consumption:

How often do you purchase coffee in a week?

o 1-2 times

o 3-5 times
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o More than 5 times

2. Preferred Coffee Products:

What type of coffee do you usually purchase?

o iced coffee

o hot coffee
3. Coffee Consumption Patterns:

Where do you most frequently purchase coffee?

o On-campus café

o Off-campus coffee shop

III. Fundamental Determinants Influencing Coffee Purchasing Decision

Direction: Read and assess the following items, then place a check (✔) on the box

under the following factors based on their level of importance in your coffee purchasing

decisions. Please refer to the scale below and their corresponding numbers and

descriptions when answering.

1 = Strongly Disagree 2 = Disagree 3 = Neutral

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4 = Agree 5 = Strongly Agree

Taste
5 4 3 2 1
I am likely to…
purchase coffee with richness and
depth of flavor, as it enhances my
overall coffee experience.
purchase coffee with aromatic and
pleasing aroma, as it contributes to my
enjoyment of the coffee.
purchase coffee with smoothness of
texture, as it adds to the satisfaction of
my drinking experience.
purchase coffee with boldness or
strength, as it satisfies my craving for a
strong, or intense taste experience.

Price
5 4 3 2 1
I am likely to…
purchase coffee with budget-friendly
prices, considering my personal
budget.
purchase coffee that offers promos and
discounts.
purchase coffee with reasonable
pricing for quality, as it assures me
that I am getting good value for my
money.
purchase coffee with lower prices
compared to other shops.
Ambiance

I am likely to…
purchase coffee if the coffee shops
have comfortable seating
arrangements, which enhance my
coffee purchasing experience as they
promote relaxation and enjoyment.
purchase coffee if the coffee shops
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have a welcoming and cozy
atmosphere, as it creates a pleasant
environment for coffee enjoyment.
purchase coffee if the coffee shops
have a pleasant lighting and decor, as
they contribute to the overall ambiance
and mood of my drinking experience.
purchase coffee if the coffee shops
have cleanliness and tidiness, as it
reflects the quality standards of the
establishment.
Location Accessibility
5 4 3 2 1
I am likely to…
purchase coffee if the coffee shops are
near the campus, as it adds
convenience to my purchasing routine.
purchase coffee if the coffee shop is
easily accessible from regular routes,
as it affects my convenience in visiting
and buying coffee.
purchase coffee if coffee shops have
convenient parking options, as it
simplifies my experience when buying
coffee.
purchase coffee if the coffee shops
have good accessibility via public
transportation, as it expands my
options for visiting the coffee shop.
Product Design

I am likely to…
purchase coffee with appealing
packaging or presentation of the coffee
products, as it captures my attention
and interest to buy coffee.
purchase coffee with a variety of
options available (e.g., sizes, flavors),
as it allows me to explore different
choices and preferences when buying
coffee.
purchase coffee with innovative or
unique offerings, such as new and
inventive flavors or coffee blends that
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make my purchasing experience more
enjoyable and memorable.
purchase coffee with aesthetic appeal,
as it contributes to the mood of my
coffee-drinking experience.