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Chapter I

Problem and It’s Background

Introduction

Retail is the sale of goods to end users, not for resale, but for use and consumption

by the purchaser. Retail involves the sale of merchandise from a single point of purchase

directly to a customer who intends to use that product. The single point of purchase could

be a brick-and-mortar retail store, an Internet shopping website, a catalog, or even a

mobile phone. The retail transaction is at the end of the chain. Manufacturers sell large

quantities of products to retailers, and retailers attempt to sell those same quantities of

products to consumers. Barbara Farfan (2018)

The importance of this study is to give an in-depth look or perception about

running a retailing business and its effect to the society and economy. Even give ideas

and innovative decisions to future entrepreneurs that co-relate with retailing businesses.

The researchers chosen to make this study to gather information and interpreting them so

they can be read by future business enthusiast to put up this type of business because in

our country businesses like these are more common these days. The purpose of the study

is to have ideas from present business owners particularly in the field of retailing on how

they maintain, innovate, develop, and sustain n their businesses in regards with the

growing and developing technology of the modern generation.

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Background of the Study

Philippine retail industry booming: The Philippine retail industry is anticipated to account

for a fifth of the country’s overall economic output in the next decade. According to

infrastructure group KGLI Asia CEO/group investment director Mark Williams, the

positive growth is being driven by a business process outsourcing (BPO) industry that is

expanding at a rate of least 10 percent annually, and a middle-class population that is

projected to reach 8.4 million by 2030. Total offshore remittance is growing at about 11

percent annually. Quoting an AT Kearney report, Williams says Asia Pacific has four of

the five top countries in the Global Retail Destination Index (GRDI), thanks to a

combination of large populations and high growth. The Philippines has the second-

highest time pressure score, just after Vietnam, indicating an urgency to enter the country

and capture growth opportunities. “Indeed, activities have been brisk in recent years,”

says the report. The latest entrants include Canadian F&B brand Tim Hortons,

Singaporean F&B brands Baker & Cook and Plank Sourdough Pizza, and Hong Kong

furniture brand Simply Modular. Mega-size developments include Japanese department

store Isetan teaming up with Federal Land to build a mixed-used complex on an 11ha site

next to Grand Hyatt Tower in Taguig City. It will be Isetan Mitsukoshi’s first store in the

Philippines. Inside Retail Asia (2017)

Retail is a term which covers a vast range of business types and models. Some of

the different types of retail store include: (1) Convenience store – a small to medium

grocery and convenience shop usually operating near residential areas.(2) Speciality store

– a store which concentrates on narrow product areas, eg clothing, electrical goods,

entertainment.(3) Supermarket – a medium to large grocery and household store aiming

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for low-margin / high-volume sales.(4) Discount store – a small, medium or large shop

which sources end-of-run stock or branded goods to sell at heavily discounted prices.(5)

Department store – a large store with a range of goods and services, divided into

departments which can be individually managed by buyers, merchandisers or a separate

private business.(6) Warehouse / direct retailer – a medium to large store, usually off the

high street, stocking goods directly from manufacturer or with costs of another step in

supply chain removed. (7) Online store - selling directly to customers through an e-

commerce website. Picking the right product types is important. You’ll need to have a

good sense of the local market – the customer demand, the existing businesses trading in

the sector, any barriers to market, eg regulatory, cost. NIBUSINESSINFO (2018)

“I am often asked to qualify or identify whether a certain business activity of a

prospective client falls under the retail category or not. It is important to know such

because first, retail trade is reserved for Filipino citizens, and second, under certain strict

conditions foreign participation may be allowed but a huge capitalization is attached to it.

Before the year 2000, Philippine retail business activity was governed by the Retail Trade

Nationalization Law. It is really intended to limit the retail business to Philippine

Nationals. However, on 27 March 2000, Congress saw the light and realized of the

possible influx of foreign investors should the retail be liberalized. Hence, the enactment

of the new Retail Trade Liberalization Act which aims to promote consumer welfare by

attracting, promoting and welcoming productive investment that will bring down price

for the Filipino consumer, create more jobs, promote tourism, assist small manufacturers,

stimulate economic growth and enable Philippine goods and services to become globally

competitive through the liberalization of the retail trade sector. Now what really is a retail
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trade business activity? It basically covers any act, occupation, or calling of habitually

selling direct to the general public merchandise, commodities, or goods for consumption.

In other words, all activities that pertain to all habitual acts of selling direct to the general

public of any merchandise or goods. The law does not mean, however, that retail trade is

completely liberal. It just paved the way for both Filipinos and foreign investor to exploit

the retail industry under certain conditions”. Atty. Grace R. Pangilinan (2012)

There's a saying in retail that the "customer is always right". While this motto is

often relevant for retailers and other business owners alike, letting customers call all the

shouts won't make a retailer successful. And while every merchant is different and every

store has its own demands and goals, the following habits are repeatedly observed among

many successful retailers. There are five habits that a successful retailer must have: (1)

Habit One: Prioritizing is Key. (2) Habit Two: Letting Go Is a Must. (3) Habit Three:

Training Staff is Vital. (4) Habit Four: Knowing the Competition is a Priority. (5) Habit

Five: Shifting Store Inventory is "Okay". Finally, successful retailers typically have one

more thing in common... and that is the acceptance that they can't run their stores alone.

For some, this means hiring great people to effectively manage all the necessary

operations of their stores. For others, this means investing in outside consultants, service

providers or companies that can aid their retail stores in a variety of ways that the store

owner alone cannot. For all, however, it means willingly investing in people and

companies to help their stores achieve success. And on a final note, each of these habits

wouldn't exist without the willingness to accept change. Recognizing that retail is always

evolving and that consumers are, as well, can help retailers stay competitive and relevant

in today's modern marketplace. Nicole Leinbach-Reyhle: Forbes Contributor (2014)

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Statement of the Problem

This study aims to know the effects of retailing businesses in Capas, Tarlac. It

seeks to answer the following question:

1. Demographic characteristics of the business

1.1. Name of business

1.2. What type of ownership

1.3. Specific location of the business

2. What are the effects of retailing businesses in Capas, Tarlac?

2.1. What are the similarities of the different merchandising business in

Capas, Tarlac in terms of managerial structure?

2.2. What are the differences in terms of managing their businesses?

2.3. What strategy specifically marketing and finance does their

business use to maximize their profit?

Significance of the Study

This study aims to be beneficial and have a major role on some economic parties

or individuality. The following will benefit from the study being made:

Retailing Businesses. The study is being focused on retailing businesses in

Capas, Tarlac area so the study will give them an idea about the best and the different

profitable techniques or strategies in managing and governing a merchandising business.

Government. The government has a big role in the economic growth of the

country so from this study they can have an idea about the fast growing enterprise of
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retailing and will give them information about the struggles of putting up and managing

this type of business.

Teachers. The education department too will have a benefit from this study

specially the teachers that have subjects connected to business education because of the

unraveling information that the study will reveal about the true story behind successful

merchandising or retailing businesses that they can teach to future entrepreneurs.

Future Researchers. The ideas of future minds can be inserted or added to the

research so it will be clearer and much more relevant to the public. This research will

help the future researchers to have some background of the topic and serve as a related

study to their own research. Also, this research will also serve as a reference in future

studies.

Conceptual Framework

The researchers came up with a framework or paradigm that will be used as a

guide to the whole investigation of the study.

Paradigm of the Study

Independent Variables Action that will take place Dependent Variables

Demographic Charactersitic of Analization of the Data The implication of the
the Business Differentiation of the Data analyzed data to the study.
Testimonies and Data Acquired Identification of Similarities of Best strategies applicable for
the Testimonies Given retailing businesses.
The true effect of retailing
businesses on the economy of
the country.

Figure 1.1
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Assumptions

The study is conducted based or in regards on the following assumptions:

1. The retailing businesses will have various strategies or techniques of their

own to help their business to develop and grow.

2. Some historical preferences or views of older studies about this topic will

have an effect to this study and the study hopefully updates those early

researches that have been made.

3. There is a chance of having the business that is being interrogated will not

cooperate, the researchers will not force the owners in providing information

that are not being said.

Hypothesis of the Study

If this research will be successful it will deeply explain the true story behind

merchandising and retailing businesses. The true meaning, nature and characteristics of a

successful retailing business will be identified.

The businesses in the present have very little knowledge of what is the real

technique or strategy to acquire true success; by using this study we are collecting data or

testimonies from successful businesses in terms of retailing and disseminating the data to

the relevant and important information on how to truly run a successful business.

Hopefully the objectives of the researchers are met and without hindrances and obstacles

this research will be a success.

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Scope and Delimitation

This research aims to narrow the scope of the study and limits the subject. This

research targeted and focuses on the following respondents.

This research aims to acquire information from merchandising businesses in

Capas, Tarlac area specifically those which have a retailing type of selling. Also the

researchers will only include the businesses that are very successful, famous and have

limitless attention of the public.

Limitation of the Study

The research has a broad term and has some different outcomes but the

researchers have placed some guidelines to prevent shifting of the idea in the study and to

prevent or minimize mistakes and wrong turns.

The research only aims to have knowledge about the successfulness of the

retailing business in Capas, Tarlac area only so the information is more relevant to the

stated location. The questions that are asked to the owners or the person involved will be

only about the topic nothing more, nothing less. The researchers will definitely not force

the business owner or the person involved to give the specific information that is being

asked if the person who is being interrogated will voluntarily say that said information.
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Definition of Terms

Merchandising /mərCHənˌdīziNG/ (noun)

-is the activity of promoting the sale of goods, especially by their presentation in retail

outlets.

Liberalized /ˈlib(ə)rəˌlīz/ (verb)

-remove or loosen restrictions on (something, typically an economic or political system).

Marketing /ˈmärkədiNG/ (noun)

-the action or business of promoting and selling products or services, including market

research and advertising.

Finance /ˈfīnans,fəˈnans/ (noun)

-the management of large amounts of money, especially by governments or large

companies.

Economy /əˈkänəmē/ (noun)

-the wealth and resources of a country or region, especially in terms of the production and

consumption of goods and services.

Testimony /ˈtestəˌmōnē/ (noun)

-a formal written or spoken statement, especially one given in a court of law.

(Sources: Google Dictionary)