mr - chapter 1-5 (revised)

8/17/2019 Mr - Chapter 1-5 (Revised)

http://slidepdf.com/reader/full/mr-chapter-1-5-revised 1/90

University of LuzonCOLLEGE OF BUSINESS ADMINISTRATIONDaguan City

Chapter I

THE PROBLEM AND ITS BACKGROUNDRationale

Promotion is the way in a business makes its products known

to the customers, both current and potential. It is a common mistake

to believe that promotion by business is all about advertising. It is

not. There are a variety of approaches that a business can take to get

their message across to customers, although advertising is certainly

an important one. The main aim of promotion is to ensure that

customers are aware of the existence and positioning of products.

Promotion is also used to persuade customers that the product is

better than competing products and to remind customers about why

they may want to buy. It is important to understand that a business

will use more than one method of promotion. The variety of

promotional methods used is referred to as the promotional mix.Nowadays, in the retailing business, the competitive situation is

rapidly increasing. The aggressive branch expansion of big discount

stores can decrease the total revenue and market share of other

retailers, especially convenience stores. After the economic crisis,

there was a change in structure of shareholding of large discount

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stores and such a situation transformed them to become joint-

ventures between foreign and Thai entrepreneurs. After such a

transformation, the large discount stores had expanded their

branches more aggressively to cover all strategic areas in Bangkok

and other country. Normally, big discount stores stress an “everyday

low price” policy and attempts to create low-price image among

customers by various methods, especially advertisements by

Moreover, the discount store is one form of retailers that stresses on

selling products at the very low prices to customers. These

characteristics resulted in an existence of the conflict or a rivalry

between these discount stores and so many small retailers such as

convenience stores in the area to where the outlets are extended. For

7-Eleven, especially in Philippines, many branches are always located

near each other in the same area with the main reason to create

convenience for the customers. Thus only one of the new branches of

big discount stores can have an effect on many branches of 7-Eleven

in that area. From this serious problem, 7-Eleven has to improve and

develop the strategies to differentiate it from others in order to

compete with the competitors. One of the efficient strategy that 7-

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Eeven had used to gain a better competitive position in the mind of

customers is to create and improve store loyalty. Gain the loyalty from

their most profitable customers. Loyal customers increase sales by

purchasing a wider variety of the company’s products and by making

more frequent purchases; they always buy 3 more and generate more

profit also. Otherwise, loyal customers are most likely to remain with

that company for long period, purchase multiple products and

services, and recommend the company to their friends and relations.

Moreover, once customers develop loyalty to a store, they will

downplay the negative aspects and enhance the positive. So building

customer loyalty is one of the biggest challenges for the retail industry,

especially 7-Eleven in the competitive situation like this.

(www.lib.ku.ac.th/kuis/2549/warakon-suk-all.pdf) Finally, Bowen and Chen (2001) gave the interesting definition

that loyal customer will also help promote your company. They will

provide strong word-of-mouth, create business referrals. Marketers

use loyalty-building strategies to help improve customer retention and

maximize share of customer. One of the industries in which loyalty

programs have been used frequently is retailing. When a customer

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walks out the door of a retail establishment, the marketer can never

be sure that the customer will ever come back. O’Malley (1998) gave

the basic idea of loyalty program that it is to reward customer’s repeat

purchasing and encourage loyalty by providing targets at which

various benefits can be achieved. For 7-Eleven, it also used loyalty

program to increase total revenues by stimulation repeat purchase

and frequency of visit of the customer. “7-Eleven Everyday Reward”

will lead customers to come back again and use points to change

products in the store or to collect in different number for exchanging

many licensed souvenirs of 7-Eleven. Marketers want customers not

only to visit their store, but to visit it again and again in preference

over other competing stores. They want to earn their customer’s

loyalty. Now, due to the popularity of frequency programs in general,

trading Everyday Reward are enjoying renewed interest as a continuity

vehicle. Everyday Reward Card is primarily a generator of repeat

purchases and reward for loyalty.McIlroy and Barnett (2000) suggested the interesting idea that

an important concept to consider when developing a customer loyalty

program is customer satisfaction. Satisfaction is a measure of how

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well a customer’s expectation are met while customer loyalty is a

measure of how likely a customer is to repurchase and for engaging in

relationship activities. Moreover, many customer satisfaction studies

have concluded that there is a significant relationship between

customer satisfaction and loyalty including profitability.Bowen and Chen (2001) also supported the idea that there are

two critical thresholds affecting the link between satisfaction and

loyalty. On the high side, when satisfaction reaches a certain level,

loyalty increase dramatically. At the same time, when satisfaction

declined to a certain point, loyalty dropped equally dramatically. The

more satisfied the customers are, the longer they stay and thus the

higher the retention rate, satisfied customers are more likely to return

to those who have helped them, and dissatisfied customers are more

likely to go elsewhere next time. The key for companies to survive is

the retention of satisfied customers. Companies that provided high

levels of customer satisfaction, who delight their customers will retain

them and be able to sell them more because they want to buy more

from these companies. Satisfied customers often lead to repeat

business and referrals because they will repurchase products and

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services, then recommend products and services to others and finally,

generate positive word-of-mouth, and certainly all of these greatly

contribute to long-term profitability. From all of the reasons above, to

compete and survive from serious aggressive expansion of big

discount stores that relevant to total revenue, 7-Eleven had used

efficient strategy to gain a better competitive position in the mind of

customers by creating loyalty program that is “7 Eleven Reward Card”.

And the important concept to consider when developing loyalty

program is customer preferences, moreover, many researchers have

concluded that there is a significant relationship between customer

purchasing pattern and customer preferences. Thus, this study

intended to investigate and approve this assumption by using the

loyalty program of 7-Eleven as the referent evidence. Furthermore,

this study intended to evaluate the efficiency of the loyalty program of

7-Eleven to assure whether this loyalty program can build customer

loyalty than other its competitive convenience store like Ministop.Ministop Philippines, is also chain of 24-hour convenience

stores like 7 Eleven that operate as a grocery and fast food diner

combined, has a core business policy that is has given the acronym

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QSC+A. It stands for "Quality, Service, Cleanliness and

Assortment/Availability”.

(http://www.entrepreneur.com.ph/franchising/ministop-philippines-

a-true-business-partner) The same as 7 Eleven, Ministop also use Frequency Marketing

Program to build customer loyalty this is the “Minit STOP Rewards” The study will be very beneficial to 7-Eleven in improving the

Everyday Reward Card from its competitors like Minit STOP Reward

by Ministop. And the programs like this will certainly occur because

the Everday Reward Card is already registered as the annual loyalty

program of 7-Eleven until now, thus, incremental and continuous

improvement is the crucial consideration for achievement.

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http://www.entrepreneur.com.ph/franchising/ministop-philippines-a-true-business-partner







Theoretical Framework

The researchers anchored this investigation on the theories

underpinning promotional aspect of business operation that served as

the premise of the study.In order to determine whether or not incentives are important to

consumers' perception of the loyalty program, which this work

attempts to corroborate, we started out with the contributions. 7-

eleven established the existence of five internal attributes

subsequently contrasting their influence in consumers' decision to

participate in their promotional strategy. Personal data consumers are

disinclined to facilitate certain data to the company, this can be a

factor that moderates their desire to participate in the program.

Participation cost certain amount of money that has to be paid in

order to be able to participate in loyalty program. Buying volume and

frequency Consumers who buy more are more favorable to the

program because they have more access to the rewards. Exclusiveness

of the program is whether the program is massive or, on the contrary,

it is restricted to a specific group of consumers. Participation effort,

this values the complexity of the procedures of using and collecting

information about the loyalty program.

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Conceptual Framework

This study will concentrate on understanding customers’

attitude and perception toward the Frequency Loyalty Program of 7-

Eleven, “7-Eleven Everyday Reward Card” assumed to use loyalty

program as the marketing tool to make the customer return and

retain the current customers to be loyal with the company. So this

study will evaluate the success and the efficiency of this loyalty

program by using the level of customer purchasing and customer

preferences. Thus, the conceptual frameworks that were referred in

this study can be illustrated as follow:Customer Purchasing Pattern

To buy is to purchase. To shop is to visit business

establishments for inspection or purchase of goods. Therefore

shopping is an element of customer behavior in purchasing.Similarly a distinction should be made between purchasing

habits and purchasing behavior patterns. Habit is a tendency toward

an action which by repetition has become spontaneous. A pattern is a

design or type. Each customer has his or her own purchasing habits.

Purchasing behavior patterns represent the design of behavior of a

large number of customers.

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(http://www.ecu.edu/cscas/anth/nuevosouth/upload/studyingcusto

merbehaviorinretailstores-090623023217-phpapp01-slideshare.pdf)Studies of customer purchasing behavior pattern in convenience

store deal with (1) identification of customers and (2) their behavior

patterns. The aim of such studies is to ascertain who buys where,

what, when and how. In addition such studies endeavor to learn

about customer response to promotional program. After a customer has enrolled in a Frequency Marketing

Program (promotional program) to a convenience store, that adoption

should favor repeat purchase behavior if the program provides an

adequate level of usefulness. The behavioral conceptualization of

loyalty further suggests that loyalty schemes should create behavioral

reinforcement rather than influence persuasion or long-term changes

in attitudes and commitment. That is, satisfaction with purchases

associated with the program, and any consequential habit formation,

explain most of a person’s ongoing propensity to buy again in a store.

(Rothschild and Gaidis, 1981) The contingency approach also suggests that a loyalty program

should gain greater loyalty by responding directly to contingent factors

(i.e., rewards, promotions, points.). If purchase loyalty gets created, it

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should first occur through a short-term “points pressure” impact and

subsequently through a long-term “rewarded behavior” effect that

results from the behavioral learning reinforcement provided by the

gratification (Taylor and Neslin 2005). To the extent that the program

sufficiently rewards store loyalty (i.e., utilities are higher than costs),

re-patronage should persist, and the purchase level should move

above a baseline. Loyalty program member (customer) should show

changes in repeat-purchase loyalty which is not evident amongst non-

program member, specifically; Decreased switching to non-program

convenience store, Increased allocation of share of requirements,

Increased repeat-purchase rates, Increased usage frequency, Greater

propensity to be exclusively loyal to participating businesses and

Greater propensity to switch between participating businesses and

fewer propensities to switch to non-program businesses.

(https://byronsharp.files.wordpress.com/2008/03/4025loyaltyprogs.

pdf)Customer Preferences

Customer preferences are defined as the subjective or individual

tastes, as measured by utility, of various bundles of goods that they

purchase. They permit the consumer to rank these bundles of goods

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according to the levels of utility they give the customer. The

preferences are independent of income and prices. Ability to purchase

goods does not determine a consumer’s likes or dislikes. A customer

can have a preference for Convenience store over another but only

have the financial means to purchase at that particular convenience

store. Customers as consumers of convenience store product and

services make decisions by allocating their scarce income across all

possible goods in order to obtain the greatest satisfaction. Thus

customers will opt for retail stores where they will maximize their on

their basket of expenditure and their preferences catered for

efficiently: their taste and preferences are matched (Ravald&Gronroos,

1996).Customers change their needs and preferences in search of

utility of which, utility is defined as the satisfaction that a consumer

derives from the consumption of a good. As noted above, utility’s

determinants are decided by a host of noneconomic factors. Consumer

value is measured in terms of the relative utilities between goods

Reichheld (1996) these reflect the consumer’s preferences that

convenience store should strive to obtain as it leads to customer

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satisfaction an attribute that breeds customer loyalty. An individual

customer has a set of preferences and values whose determinations

are outside the realm of economics. They are no doubt dependent

upon culture, education, and individual tastes, among a number of

other factors that the convenience stores face in developing customer

loyalty as they have different tastes and preferences that keep on

changing. Thus the convenience store have to be swift on and

research to remain relevance in offering the customers preferences

(Doherty, 2008).In order to determine that a convenience store like 7-Eleven

accomplish the customer preference of a consumer we made a study

about the frequency marketing program have an impact to gain loyalty

of the customer. A successful loyalty program provides substantial

benefits to businesses, relying on the simple fact that people

appreciate receiving rewards. Numerous methods for managing loyalty

schemes have been trialed, all of which functioning on the rewards

principle. Through implementing a well prepared and developed

loyalty program, businesses can ultimately gain a strengthened

relationship with customers, increase sales, improve customer

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product awareness and form a better understanding of customer

preference. The researchers present their paradigm of the study using the

model which includes the different variables of the study—the input,

the process, and the output. Theinput of the study presents the salient point of inquiry, it

assessed effects of frequency marketing program of 7- Eleven in terms

of purchasing pattern and preferences of the customers. Another is, it

assessed the frequency marketing program related issues and which

are the basis of proposing measures to improve the frequency

marketing program of 7-eleven.Process entails the analysis to be done along with the above

mentioned areas concern which was identified with the aid of the

profile and papers that were gathered and results were presented

using the checklist questionnaires and documentary analysis was

distributed among the customers of 7-eleven to identify the Effects of

frequency marketing program of 7- Eleven.Outputof the study dealt with the proposed measures to

improve the frequency marketing program of 7-eleven. The aforementioned Paradigm of the study is depicted in

Figure1 below.

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INPUT PROCESS OUTPUT

Feedback

FIGURE 1: Research Paradigm

Statement of the Problem

This study aimed to determine the effects of Frequency

Marketing Program of 7-eleven as experienced by the customers of the

said business firm in order to know the effectiveness of their

promotional activity in different aspects and to provide other

promotional strategies that may improve its marketing activities.More specifically, this study shall answer the following research

questions:

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Assessment of thefollowing:

1.Effect of the Frequency

Marketing Program of

7-eleven:a. Customer

Purchasing Pattern b. Customer

Preferences2. Problems Encountered

in Frequency

Marketing Program of7-eleven

1. Effects of frequencymarketing program of

7- Eleven

a. Customer

Purchasing Pattern

b. Customer

Preferences

2. Problems

encountered in

frequency marketingprogram of 7-Eleven

Proposed measures

to improve the

frequency

marketing program

of 7- Eleven




1.) What are the effects of frequency marketing program of 7-

eleven in terms of:a Customer Purchasing Pattern

b Consumer Preferences?2.) What are the problems encountered in the frequency

marketing program of 7-eleven?3.) What measures can be proposed to improve the frequency

marketing program of 7-eleven?

Assumptions of the Study The following are the assumptions of the study:

1 The questionnaire used in this study is valid and reliable.2 The responses given by the customers of 7-eleven were

objectively and honestly given.3 The proposed alternative scheme can further improve the

promotional strategy of 7-eleven particularly the

frequency marketing program.

Scope and Delimitation

The coverage of this study is to determine the effects of

Frequency Marketing Program of 7-eleven in terms of Customer

Purchasing Pattern and Costumer Preferences. The study also covers

the problems encountered of the said entity in using Frequency

Marketing Program. The study does not cover the products offered by 7-eleven and is

limited to promotional aspects of the said entity.

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Significance of the Study

This part of the study provides the essence and benefits of

conducting a research to the following beneficiaries:7-eleven branches. The problems of the business firm regarding with

the promotional activity were determined in this study. This study will

help them how to enhance their own strategy for them to survive and

provide the best quality service to their customers.To the Manager. The owner who shall earn profit from the business,

this study will help them improve and fill their lacking in terms of

sales, market share, and market demand aspects.

To Future Researchers. This study will guide them to know more

about the effects of Frequency Marketing Program of 7-eleven and will

give them the idea about the abundance and lacking in this business.

This study may serve as a stepping stone for further improvement of

future researches in this kind business.To the Customers. This study will help them to understand their

advantages in using 7-Eleven Everyday Reward Card. In be more

knowledgeable about this promotional strategy.Definition of Terms

This part of the study helps the readers to understand more of

this research study.

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Effects of Frequency Marketing Program of 7-eleven.Refers to the

effects of using Every Day Reward Card of 7-eleven in terms of

customer purchasing pattern and customer preferences.

Problems encountered in the Frequency Marketing Program of 7-

eleven.Refers to the difficulties and problems encountered by the 7-

eleven. It is necessary to determine the problems that can be

encountered to come up with measures in order to fill their lacking. Proposed Measures to Improve the Frequency Marketing Program

of 7-eleven.Refer to means or ways on getting rid of the problems

encountered in the Frequency Marketing Program of 7-eleven in order

to improve their performance and functionality.

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Chapter II

REVIEW OF RELATED LITERATURES AND STUDIES This part of the study presents literature and related studies

reviewed by the researchers which have direct or indirect bearing on

the study. The conceptual and related literatures were taken from

various sources guided to the researcher in the completion of the

study.CONCEPTUAL LITERATURE

These literatures as part of our research are very helpful in the

enrichment and development of the study. It is an analytical tool with

several variations and contexts. It is used to make conceptual

distinctions and organize ideas. Strong conceptual frameworks

capture something real and do this in a way that is easy to remember

and apply.

Marketing Mix: Promotion

Promotion is one of the key factors in the marketing mix and

has a key role in market success. Promotion is used to ensure that

consumers are aware of the products that the organization is offering.

The promotional mix is the combination of the different channels that

can be used to communicate the promotional message to the

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consumers. The channels to be used are; advertising, direct

marketing, public relations and publicity, personal selling,

sponsorship and sales promotion (Rowley, 1998). One of most

important of channels is sales promotion. Sales promotion is action

focused marketing events whose purpose is to have a direct impact on

the behavior of the firm’s consumers. There are three major types of

sales promotion: consumer promotion, retailer promotion, and trade

promotion.

Throughout the world, sales promotion offered to consumers

are an integral part of the marketing mix for many consumer products

(Huff and Alden 1998, Chandon et al. 2000). Studies that strive to

understand the impact of sales promotion on consumers are very

important. Thus, sales promotion tools are amply employed by

retailers and manufacturers to achieve their commercial objectives in

terms of sales volumes, market share, category penetration, and so

forth.

Consumer promotions are promotions offered by manufacturer

directly to consumers. Consumer promotions encompass a variety of

short-term promotional techniques designed to induce customers to

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respond in some way. The most popular consumer promotions are

directly associated with product purchasing. These promotions are

intended to enhance the value of a product purchase by either

reducing the overall cost of the product (i.e., get same product but for

less money) or by adding more benefit to the regular purchase price

(i.e., get more for the money).

While tying a promotion to an immediate purchase is a major

use of consumer sales promotion, it is not the only one. As we noted

above, promotion techniques can be used to achieve other objectives

such as building brand loyalty or creating product awareness.

Consequently, a marketer’s promotional toolbox contains a large

variety of consumer promotions. (Know This Media, 2012, Know This:

Marketing Basics, http://www.knowthis.com/types-of-sales-

promotion/consumer-sales-promotions).

Samples, coupons, premiums, contests, and rebates are

examples of consumer promotions. Do you like free samples? Most

people do. A free sample allows consumers to try a small amount of a

product so that hopefully they will purchase it. The strategy

encourages trial and builds awareness. You have probably purchased

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a product that included a small free sample with it—for example, a

small amount of conditioner packaged with your shampoo. Have you

ever gone to a store that provided free samples of different food items?

Although sampling is an expensive strategy, it is usually very effective

for food products. People try the product, and the person providing

the sample tells them about the product and mentions any special

prices for it.

Another very popular sales promotion for consumers is the

Frequency marketing program, include things such as frequent flier

programs, hotel programs, and shopping cards for grocery stores,

drugstores, and restaurants. (Tanner, Jeff and Raymond, Mary Anne

Principles of Marketing, v. 2.0)That this tool offer customers a reward,

such as price discounts and free products, for frequent purchasing or

other activity.These promotions have been around for many years but

grew rapidly in popularity when introduced in the airline industry as

part of frequent-flier programs.

Frequency Marketing Program

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In order to develop a successful promotion strategy a clear

definition of the targeted market must be included. It is important to

note that the character of sales promotion like Frequency Marketing

Program has been changing slightly over time, with the arising of

relationship marketing. Frequency marketing program, like other

traditional forms of marketing activities, have been about mass offer

(Mitchell, 2000)

Frequency Marketing is a marketing strategy which is used to

lure and retain customers for a long term. Frequency marketing

includes events like advertising at frequent intervals, giving discounts

to loyal customers, organizing events etc. As the word suggests this

type of marketing strategy needs to be carried out at frequent

intervals of time to retain their customers.

Frequent marketing is a good tool to ensure retention of

consumers. It is a known fact that an existing customer yields more

income for a company than a potential customer i.e. the amount of

money and revenue generated by an existing customer is more than

that of what a potential customer would generate. Hence, in order to

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adopt a frequency marketing approach a company needs to do an

analysis of what kind of business it is in. If a company’s business has

one of a time business and it expect no business from the existing

customer or from any other customer the company may not indulge in

frequency marketing. However, if it is a repetitive business then the

company needs to do frequency marketing more frequently.

(http://www.mbaskool.com/business-concepts/marketing-and-

strategy-terms/11917-frequency-marketing.html)

Frequency marketing is designed to reward regular customers

as well as those who buy in large quantities. The rewards vary but

may include discounts and merchandise prizes. The main goals of a

frequency promotional program are repeat sales andcustomer loyalty.

There are many ways companies use frequency marketing to prompt

customers to buy more of their products.

Thesales strategy is to keep customers buying more products to

get the reward offered in the hopes they will become long-term buyers.

Companies often have to use specific marketing strategies to help

inspire customer loyalty if they have strong competitors. The more

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http://www.wisegeek.com/what-is-customer-loyalty.htm

http://www.wisegeek.com/what-is-a-sales-strategy.htm

http://www.wisegeek.com/what-is-customer-loyalty.htm

http://www.wisegeek.com/what-is-a-sales-strategy.htm




customers keep buying their product, the greater chance they will

purchase less of the competitor's brand. (Cyprus, 2003)

A frequency marketing program should benefit both the

customer and the business but in many cases the loyalty program

begins to cost the business more money than it is worth. Businesses

should use loyalty programs to increase customer loyalty and retain

regular customers because by retaining just 5% of their customers,

businesses can increase their profits by nearly 100%. According to a

report by Manta, repeat customers spend as much as 67 percent more

on purchases than new customers do. Large and small businesses

can use loyalty programs to increase their customer retention rates

and grow their profits by targeting their customer group, creating

programs their customers are interested in and utilizing the valuable

feedback that a good rewards program can provide them.

Frequency marketing programs are a great way for both small

and large businesses to increase their customer loyalty and improve

theircustomer retention. By creating a focus on a target group and

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http://business.collectrewards.com/loyalty-guide/


http://www.cleverism.com/how-to-manage-increase-customer-retention/



http://www.cleverism.com/how-to-manage-increase-customer-retention/




providing them services they are interested in, businesses can avoid

the pitfalls that plague many loyalty programs in the market today.

Identifying a target market is one of the most important tools in

business, and this includes loyalty programs.Segmenting

customers into defined groups helps businesses to make sense of data

and make more informed decisions regarding their customers. By

segmenting customers, businesses can easily identify their most

profitable customers as well as focus on customers who are most

likely to engage with the business. Loyalty programs do not benefit

from casting a wide net and by identifying a target audience,

businesses can use their resources wisely. This does not mean that a

business should only focus on its most profitable customer base, but

it does allow businesses to adjust their marketing for specific groups.

To most effectively market to their customers, businesses should work

with a manageable number of segments rather than trying to meet the

needs of several customer groups with one target.

Once customers have been broken up into manageable groups

according to their behaviors, businesses can identify the types of

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http://www.cleverism.com/complete-guide-to-market-segmentation/







behavior that they want to encourage through their loyalty program.

To begin, businesses must identify the behaviors that are most

important to them. Some businesses may want to reward the big

spenders while others may way to reward the frequent visitors, and

they should recognize the difference between the two. For example,

Delta Airlines recently changed its Skymiles program to reflect the

amount of money spent on each ticket purchase so that customers

who routinely buy expensive tickets can earn the similar rewards as

those who regularly take long-haul flights. By prioritizing the kind of

behavior they want to encourage, businesses can reach out to their

customer bases more easily and reward them fairly for their loyalty.

(http://www.cleverism.com)

There are several different kinds Frequency marketing program,

and most businesses choose one to participate in. One of the most

Frequency marketing programs for retailers is a points-based

program. A points-based program will award customers points for

engaging with the company. Often times, customers are awarded

loyalty points for their .purchases. This is a simple service but the

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downside for customers is that many programs do not offer rewards in

the short term. Businesses like airlines and hotels often offer a

different kind of program called tiered programs. By offering a tiered

loyalty program, they can separate their most loyal clients from the

more casual users. Tiered loyalty programs often have few benefits for

those in the lowest tiers, but the rewards can be very lucrative for the

most loyal customers. These types of programs cost a lot of money for

both the customer and the business. The final major loyalty program

is a coalition or partnership program. These programs work on an

open system where customers can earn rewards points by shopping

with participating businesses. While customers delight in this kind of

open system, it is not advantageous for most businesses because it

does not stress loyalty like other programs do.

Grocery chains and other retailers often use a membership card

system. Customers sign up for and receive a card they can use to

receive discounts or points to apply to free merchandise. Point

catalogs contain items that members may choose from if they save up

the required points. Since many of the larger items may take either

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years to save up for or require large purchases, the company hopes to

achieve customer loyalty through repeat business. A loyalty card

program is an incentive plan that allows a retail business to gather

data about its customers.

Loyalty cards often resemble plastic credit cards but they can

also be keychain fobs or stickers. Typically a loyalty card has

a barcode or magnetic stripe that's scanned at the point of sale (POS).

The card identifies the customer and sends information about what

the customer bought to a database. The information in the database

is used to help the retailer understand and influence his customers'

buying habits. According to research carried out by Boston

University's College of Communication, eighty-six percent of American

shoppers are listed in a loyalty database; a majority of survey

respondents said receiving the card was worth giving up some

measure of privacy.(Rouse, Margaret 2000-2016,

http://searchcrm.techtarget.com/definition/loyalty-card-program)Loyalty cards were initially designed to offer rewards to regular

customers and therefore to encourage them to keep shopping in the

same store.

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http://searchmanufacturingerp.techtarget.com/definition/bar-code

http://whatis.techtarget.com/definition/point-of-sale-terminal-POS-terminal

http://searchmanufacturingerp.techtarget.com/definition/bar-code

http://whatis.techtarget.com/definition/point-of-sale-terminal-POS-terminal




As technology has developed the cards have become a rich

source of data for the companies that offer them. Storesreap financial

and strategic benefits from using the cards to find out what customers

are buying. (Arnett, et. al., 2003 )

A convenience store is a smallretail business that stocks a

range of everyday items such asgroceries,snack

foods,candy,toiletries,soft drinks, tobacco products, magazines and

newspapers. Such stores may also offer money order and wire

transfer services. In some jurisdictions, corner stores are licensed to

sell alcohol, typically beer and wine. They differ fromgeneral store

sand village shops in that they are not in a rural location and are

used as a convenient supplement to larger stores. A convenience store may be part of agas/petrol station. It may

be located alongside a busy road, in an urban area, or near arailway

or railroad station or other transport hub. In some countries,

convenience stores have longshopping hours, some being open 24

hours.Convenience stores usually charge significantly higher prices

than conventionalgrocery stores orsupermarkets, as convenience

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http://www.theguardian.com/money/2013/jun/08/supermarkets-get-your-data


https://en.wikipedia.org/wiki/Retail

https://en.wikipedia.org/wiki/Groceries

https://en.wikipedia.org/wiki/Snack_foods


https://en.wikipedia.org/wiki/Candy

https://en.wikipedia.org/wiki/Toiletries

https://en.wikipedia.org/wiki/Soft_drinks

https://en.wikipedia.org/wiki/Money_order

https://en.wikipedia.org/wiki/Wire_transfer


https://en.wikipedia.org/wiki/Beer

https://en.wikipedia.org/wiki/Wine

https://en.wikipedia.org/wiki/General_store


https://en.wikipedia.org/wiki/Filling_station

https://en.wikipedia.org/wiki/Railway_station


https://en.wikipedia.org/wiki/Shopping_hours

https://en.wikipedia.org/wiki/Grocery_store

https://en.wikipedia.org/wiki/Supermarket



https://en.wikipedia.org/wiki/Retail

https://en.wikipedia.org/wiki/Groceries



https://en.wikipedia.org/wiki/Candy

https://en.wikipedia.org/wiki/Toiletries

https://en.wikipedia.org/wiki/Soft_drinks

https://en.wikipedia.org/wiki/Money_order



https://en.wikipedia.org/wiki/Beer

https://en.wikipedia.org/wiki/Wine



https://en.wikipedia.org/wiki/Filling_station



https://en.wikipedia.org/wiki/Shopping_hours

https://en.wikipedia.org/wiki/Grocery_store

https://en.wikipedia.org/wiki/Supermarket




stores order smaller quantities ofinventory at higher per-unit prices

from wholesalers. However convenience stores make up for this by

having longer opening hours, serving more locations, and having

shorter cashier lines.

(https://en.wikipedia.org/wiki/Convenience_store).In other country, whereas in Japan, Convenience stores

primarily sell food including a large range of meals, snacks and

sweets, such asonigiri (rice balls), sandwiches, bread, chips, candy,

obento (lunch boxes), instantramen, microwave meals and hot foods

like fried chicken, nikuman and oden. Some cold foods, such as

onigiri, can be heated up by the store staff. The stores also sell all kinds of hot and cold beverages including

soda, coffee,tea, water, sport drinks, juice, milk and vitamin drinks.

The selection changes frequently and often varies by season as well.

Many convenience stores also sellalcoholic beverages including beer,

happoshu, chuhai,sake, shochu and wine.Other goods available include body care products, cosmetics,

batteries, blank CDs and tapes, umbrellas, newspapers, magazines

andmanga. Some stores, particularly outside of the city centers, have

atoilet.(http://www.japan-guide.com/e/e2071.html)

33

https://en.wikipedia.org/wiki/Inventory

https://en.wikipedia.org/wiki/Convenience_store

http://www.japan-guide.com/e/e2043.html#onigiri

http://www.japan-guide.com/e/e2042.html



http://www.japan-guide.com/e/e2037_sake.html



https://en.wikipedia.org/wiki/Inventory


http://www.japan-guide.com/e/e2043.html#onigiri




http://www.japan-guide.com/e/e2037_sake.html






In the Philippines, most urban Filipinos, convenience is starting

to move beyond just a store format; convenience is evidently becoming

a lifestyle,” declares Navalta. “Convenience stores and manufacturers

alike should develop products, packaging, formats or sizes that are

driven by the need for convenience. The store environment should

always promote ease of shopping — allowing shoppers to get in and

out of the store quickly —so they can opt to use their precious time

doing activities that matter more to them.

(http://pana.com.ph/filipinos-increasing-appetite-for-convenience-

spurring-convenience-store-growth/). Today, 7-Eleven is the country’s biggest convenience store chain

with over 700 stores. With a broad offering of everyday grocery items,

fast food, telecom, bills payment and banking kiosk services, 7-Eleven

has been awarded numerous times by the Philippine Franchise

Association, as well as Entrepreneur Philippines. 7-Eleven has won

titles such as Best Foreign Franchise, Fastest Growing Franchise, Best

in Franchise Support, Marketing Campaign of the Year, and Hall of

Fame International Master Franchise award.Nowadays, many researchers were interested to study the

linkage between customer satisfaction, customer loyalty, customer

34

http://pana.com.ph/filipinos-increasing-appetite-for-convenience-spurring-convenience-store-growth/







retention, and profitability. While the direct relationship between

customer satisfaction and customer loyalty has been shown to be

complex and asymmetric, and some research has shown that

switching behavior and repurchase intentions are not consistent with

satisfaction levels. A number of studies suggested that there is a

significantly positive relationship between customer satisfaction,

customer loyalty, customer retention, and profitability. This study is focused on the promotion of one of the most

famous convenience store in the Philippines which is the 7-Eleven.

Convenience sampling was employed and self-administered surveys

were used to gather the data. , there was a high correlation between

customer loyalty and the emotional component than cognitive

component. Thus the key findings of this study indicated that the

emotional component is an important factoring explaining loyalty,

apparently more important than cognitive component. To substantiate

the finding that the inclusion of the emotional component leads to

better results in explaining loyalty when compared to using cognitive

component alone, the result suggested that the emotional component

is an important predictor of loyalty, and customer satisfaction was

35




better explained when emotions were included. Further, while the

same variance was explained, positive emotions emerged as the best

predictor of loyalty with negative emotions also significant. The finding

indicated that having positive emotions toward service provider would

result in more loyalty to that service provider and there was a negative

association for negative feeling. How students feel about their study

experience was therefore highly relevant to the messages they are

likely to give to others, and the personal responses they are likely to

make. In conclusion, from this study, it can be imply that as there is a

significant relationship between customer satisfaction (especially the

emotional component) and customer loyalty, and based on the

assumption that it is cheaper to retain existing customer, than attract

new customers, it appears that manger need to re-emphasize how

customer “feel” about their experiences of service delivery. An obvious

extension, in retaining or enhancing customer loyalty, companies need

to explore as far as possible, mange the emotional components, and

recognize the power and importance of the emotions.

(http://www.lib.ku.ac.th/kuis/2549/warakorn-suk-all.pdf)

36

http://www.lib.ku.ac.th/kuis/2549/warakorn-suk-all.pdf





RESEARCH LITERATURE This is a compilation of reviewed literatures from unpublished

theses. Like conceptual literature, these could also improve and

complement every element that is part of the research study. According to Li, et. al., on their research entitled “Traditional

Purchasing Patterns” traditional purchase patterns can be found by

using mining algorithms for association rules and they are considered

as some beliefs of the model, that is, some generally acknowledged

laws. Then from each type of customer group, we can find some new

purchase patterns. Next, the subjective interestingness values of the

new patterns can be computed by comparing these new purchase

patterns with existing beliefs. Thus we can get the subjective

interestingness value of each customer group. The customer groups

with low interestingness values indicate that their purchase behaviors

are similar to those we have found and so we can use the existing

patterns to represent the customers' behaviors, whereas for the

customer groups with high interestingness values, their purchase

behaviors are very different from common customers, and the existing

37




purchase patterns cannot represent these customers' behaviors, so

these customers are of great value to further research.

MaCorr stated in his research entitled “Understanding

Customer Purchasing Behavior” that it is not just about connecting

with consumers. It's about connecting with the right consumers in

the right way at the right time. By understanding your consumers'

buying habits and how they make decisions, you'll have priceless

business intelligence at your disposal.

Purchase decisions are never made blindly. Even the most

impulsive shoppers can be slotted into specific and predictable

consumer buying decision categories. Using our smart business

research and customer surveys, we'll unearth a number of consumer

purchasing habits and help you take consumer shopping to an

entirely new level.

And by understanding consumer habits better than your

competition, you'll be able to sell your target what they want before

they even know they want it.

38




According to Uncles, et. al., on their research entitled “Customer

Loyalty and Customer Loyalty Programs”, Customer loyalty presents a

paradox. Many see it as primarily an attitude‐ based phenomenon that

can be influenced significantly by customer relationship management

initiatives such as the increasingly popular loyalty and affinity

programs. However, empirical research shows that loyalty in

competitive repeat‐purchase markets is shaped more by the passive

acceptance of brands than by strongly‐held attitudes about them.

From this perspective, the demand‐enhancing potential of loyalty

programs is more limited than might be hoped. Reviews three

different perspectives on loyalty, and relates these to a framework for

understanding customer loyalty that encompasses customer brand

commitment, customer brand acceptance and customer brand

buying. Uses this framework to analyze the demand‐side potential of

loyalty programs. Discusses where these programs might work and

where they are unlikely to succeed on any large scale. Provides a

checklist for marketers.

According to Sharp, et. al., on their research entitled “Loyalty

Programs and their Impact on Repeat-Purchase Loyalty Patterns”,

39




Loyalty programs are currently increasing in popularity around the

world. This paper discusses the potential of loyalty programs to alter

the normal market patterns of repeat-purchase behavior which

characterize competitive repeat-purchase markets. In line with this

thinking, a large scale loyalty program is evaluated in terms of its

ability to change normal repeat-purchase patterns by generating

‘excess loyalty’ for brands in the program. Panel data were used to

develop Dirichlet estimates of expected repeat-purchase loyalty

statistics by brand. These estimates were compared with the observed

market repeat-purchase behavior. Overall a trend towards a weak level

of excess loyalty was observed, although the expected deviation was

not consistently observed for all the loyalty program brands. Only two

of the six loyalty program participant brands showed substantial

excess loyalty deviations. However, these deviations in repeat-

purchase loyalty were observed for non-members of the loyalty

program as well as members and appear likely to be at least partially

the result of other loyalty efforts particular to these brands. According to Ganesh on his research entitled “Managing

Customer Preferences in a Multi‐Channel Environment using Web

40




Services” the technology impact on the various functions in retailing

has been increasing. As the number of channels for a retailer

increases, managing the dynamics of customer behavior in the rapidly

emerging multi‐channel environment becomes complex. Building and

retaining a long‐term association with customers require that

relationship management applications should be able to accommodate

the various channels. Multi‐channel customers are the most valuable

customers and hence multi‐channel integration would improve

customer loyalty and retention. This paper considers the impact of

Web services on multi‐channel integration, the customer decision‐

making process and the implications of effectively managing buyer

behavior for competitive advantage. The role of Web services is

explored with the help of a few customer purchase scenarios. According to Kivetz and Simonson on their research entitled

“Earning the Right to Indulge: Effort as a Determinant of

Customer Preferences Toward Frequency Program Rewards” A series

of studies with approximately 3100 consumers demonstrated that (1)

higher program requirements shift preferences in favor of luxury

rewards, (2) this effect is also observed when consumers choose

41

http://www.columbia.edu/~rk566/research/Frequency_Program_Rewards.pdf







between luxury and necessity rewards (of the same value) that they

themselves proposed, and (3) the effect of program requirements on

reward preferences is stronger among consumers who tend to feel

guilty about luxury consumption and among those for whom the

effort is invested in the context of work rather than pleasure. In

addition, contrary to an alternative explanation based on the notion

that higher requirements signal higher value of luxury rewards, the

authors show that (1) when the program requirements are held

constant but the individual consumer’s effort is higher, the shift in

preference toward luxuries is still observed and (2) increasing the

monetary cost of participating in the FP decreases consumer

preferences for luxury rewards.

Dr. Pratyush Tripathi on his research entitled "Exploring

Customer Purchase Preference in Special Reference to Vegetable

Purchase" stated that “When man learns to understand and control his

own behavior as well as he is learning to understand and control the

behavior of crop plants and domestic animals, he may be justified

in believing that he has become civilized”.

42




Nelson on his research entitled “Customer Preferences in

Vegetable Retailing” stated that Backed by the large disposable

incomes, the Vegetable sector is now witnessing an extraordinary

change in consumption patterns. Vegetable retailing is undergoing a

transformation from selling of vegetable items in grocery shops &

mandis, haats and bazzars to selling of them in supermarkets like

Easy day, Big Bazaar where consumers inspect and select the

products in a comfortable atmosphere and still pay a reasonable price

for these vegetables. Sometimes it happens that one pays less than

the price one would pay at the nearest food store. Shopping for

groceries is no longer a strenuous and uncomfortable affair. Instead,

it has become a pleasant experience. But selling vegetables and fruits

is not just that easy. To keep customers connected and to win new

customers the seller needs to do lot more than just creating quality

vegetables. Understanding the link between attitude, buying cues,

motivators and behavior towards vegetables is likely to play a deciding

role in understanding how to strive and compete in this sector.

Understanding what drives the purchasing behavior of consumers,

and how it is influenced by consumer attitude, will be a step towards

43




formulating policy and strategy which will help in refurbishing the

whole process of production as well as supply aimed at securing a

competent position in this market. As the facts confirm, there has

been double digit increase in the produce section of retailers annually.

Differentiation basis include features related to attributes such as

product features, environmental and other social outcomes as well as

experiential eating. To determine the overall significance and

readiness to purchase or to pay for those vegetables, here in this

study an attempt is made to recognize and rank a number of factors,

and analyzing on how much significant they for customer’s decision

are making process of vegetables in Punjab.

These literatures help the researchers in determining the effect

of frequency marketing programs in certain variables. It implies that

business owners must know and familiarize what factors can give full

satisfaction to their customers. It depicts that understanding their

customers, they can provide their best products and services that can

fully satisfy their customers.

Chapter III

44




RESEARCH DESIGN

This chapter presents research design of the study which

includes methods of research used, the locale of the study, instrument

used to gather data needed, and the data gathering procedure, the

respondents, and the statistical treatment of data used.Research Method Used

The study used the descriptive survey method. According to

Broto (2011), the descriptive survey method seeks to obtain facts

about existing condition, describes the nature of prevailing practices,

beliefs, events, and processes. This method aided the researchers describes systematically the

effect of frequency marketing program of 7-eleven regarding the

customer purchasing pattern and customer preferences, and the

problems encountered by the customers are all presented factually

and accurately as they happen during the time of the study based on

the responses of the respondents. This design described further the

phenomenon by establishing the relationship that exist between

variables which are identified, hence, the descriptive method was

used.

45




Locale of the Study

This study covered Burgos St., Dagupan City, Pangasinan as

the locale of the study. Dagupan is known as a First Class

Municipality and is anindependent component city in

theprovince ofPangasinan,Philippines. According to the latest

cencus, Dagupan City has a population of 163,676 people with

anincome classification of second class.

There are 9 branches of 7-eleven in Dagupan City on the

following locations: 1) Burgos St. Dagupan City, 2) Bonuan Gueset, 3)

Arellano, 4) M.H. Del Pilar, 5) Perez Blvd., 6) Mayombo, 7) Hererro, 8)

Lucao, and in 9) Tapuac .

The 7 eleven franchise is located in Burgos St., Dagupan City,

Pangasinan and is one of the busiest street in the city where the said

road serves as an entry point of vehicles coming from and going to

Lucao, Urdaneta, Sta. Barbara, Villasis and other part of Pangasinan.

The researchers provide a map of Dagupan City, Pangasinan showing

the locale of the study in Figure 2.

46

https://en.wikipedia.org/wiki/Cities_of_the_Philippines#City_classification

https://en.wikipedia.org/wiki/Provinces_of_the_Philippines

https://en.wikipedia.org/wiki/Pangasinan

https://en.wikipedia.org/wiki/Philippines

https://en.wikipedia.org/wiki/Cities_of_the_Philippines#Income_classification

https://en.wikipedia.org/wiki/Cities_of_the_Philippines#City_classification

https://en.wikipedia.org/wiki/Provinces_of_the_Philippines

https://en.wikipedia.org/wiki/Pangasinan

https://en.wikipedia.org/wiki/Philippines

https://en.wikipedia.org/wiki/Cities_of_the_Philippines#Income_classification




Figure 2. Map of 7-eleven in Burgos St., Dagupan City

47




Respondents of the Study

The respondents of the study are the customers of 7-eleven in

Burgos St., Dagupan City, Pangasinan. The respondents were

randomly selected from a sample. Simple random sampling is a type

of non-probability sampling. It focuses on sampling techniques where

the components that are investigated are based on the judgments of

the researchers.Daren S. Starnes (2008) states that, a simple random sample is

a subset of individuals chosen from a larger set (a population). Each

individual is chosen randomly and entirely by chance, such that each

individual has the same probability of being chosen at any stage

during the sampling process, and each subset of k individuals has the

same probability of being chosen for the sample as any order subset of

k individuals. This process and technique is known as simple random

sampling, and should not be confused with systematic random

sampling. A simple random sample is an unbiased surveying

technique. The respondents are composed of fifty (50) consumers all of

them being the consumers of 7-eleven in Burgos St., Dagupan City.

48




Data Gathering Instrument

The main instrument used in this study to gather necessary

information is the questionnaire (Appendix A). Questionnaire is a list

of issues or questions to be raised in the course of the data being

collected (Broto, 2011) The items in the questionnaire were formulated on the basis of

the sub-problem as reflected in chapter I. The sections of the data

gathering instruments are: 1) The Profile of the Respondents 2) Effect

of Frequency Marketing Program 3) Problems of Frequency marketing

program of 7-eleven in Burgos St., Dagupan City. The instrument was initially reviewed by the marketing research

adviser. Revisions were done to accommodate the suggestions of the

reviewers for the enrichment of questionnaire.

Validity of the research instrument

The researchers used the face validity to test the content of the

instrument wherein the proposed instruments is presented to

business experts and professor for modifications and their

suggestions were incorporated with the instrument to evaluate the

49




clarity of the items, appropriateness and substantiality of the item

used in the propose instrument. Their evaluation or the content

validity is necessary and important to improve the said instruments

before the actual floating to the respondents of this study. Content

validity is the representatives or sampling adequacy of the content,

the substance, the matter and topics of measuring instruments.

Reliability of the Research Instrument

For the reliability of the instrument used in research, the

survey questionnaire was tested on the other branch of 7-eleven in

Dagupan City, Pangasinan where the group of respondent answers

the survey questions in order to determine the accuracy and reliability

of the instrument to make the research more effective. The result of

the survey was analyzed by the researcher.

According to Garrette (1969) the test is said to be reliable

when the respondents’ response on the first try out is consistent with

their responses in their second try out. The computed percentage of

consistency of the responses will mean that the instrument is reliable.

Statistical Treatment of Data

50




The data were analyzed, interpreted and presented in tabular

form wherein frequency, mean and percentage were used.

For specific problem 1, 2, and 3, what is the effect of the

frequency marketing program of 7-eleven in terms of customer

purchasing pattern and customer preferences distributed according to

the statistical measure utilized, and what are the problems

encountered in the frequency marketing program, what measures can

be proposed to improve the frequency marketing program of 7-eleven,

a three point scale was used to the following ranges and their

corresponding descriptive equivalents:

3 = High (H)

2 = Moderate (M)

1 = Low (L)

Scale Statistical Limits Descriptive Equivalents (DE)

3 2.34-3.00 High2 1.67-2.33 Moderate1 1.00-1.66 Low

WM - Weighted MeanDE - Descriptive Equivalent AWM - Average Weighted Mean

51Summation of all Weihted Mean




AWM =

For specific problem 3, what measures can be proposed to

improve the frequency marketing program of 7-eleven, the researchers

utilized and analyzed all the data gathered to come up with the best

possible alternatives that would suit the problems encountered by the

respondents.

52

Number of Weihted Mean




Chapter IV

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter presents data analysis and interpretation of

findings obtained from primary instrument used in the study. It

discusses the respondents’ information regarding the effect of the

frequency marketing program of 7-eleven. It further discusses the

problem encountered in frequency marketing program of 7-eleven.

Discussion of which is on the basis of how the questionnaires were

answered by the respondents of 7-eleven customers.Effect of Frequency Marketing Program of 7-eleven

This present the data of the effect of the implementation of the

frequency marketing program of 7-eleven in terms of customer

purchasing pattern and customer preferences. The data is presented

in table form with descriptive equivalents and composite mean of

variables being presented. As to Customer Purchasing Pattern

Table 1 shows the effect of the implementation of frequency

marketing program of 7-eleven specifically customer purchasing

pattern.

Table 1

53




Effect of Frequency Marketing Program of 7-eleven

In terms of Customer Purchasing Patternn=50

Customer Purchasing

Pattern/Scale

H

(3)

M

(2)

L

(1) WM DE

Ran

k

I purchase more often

9(27

)

35(70

)

6(6)

2.06 M 3

I purchase more products

9(27

)

31(62

)

10(10

)

1.98 M 4

I avail the benefits of the loyalty

card

9(27

)

27(54

)

14(14

)

1.90 M 5

I save points in loyalty card17(51

)

19(36

)

24(24

)

2.22 M 1

Satisfied with the loyalty card

15(45

)

24(48

)

11(11

)

2.08 M 2

AVERAGE WEIGHTED MEAN 2.05 M

LEGEND:

Scale Statistical Limits Descriptive Equivalent (DE)

3 2.34-3.00 High (H)

2 1.67-2.33 Moderate (M)

1 1.00-1.66 Low (L)

54




Table 1 shows one of the effects of the implementation of

frequency marketing program of 7-eleven which is the customer

purchasing pattern. The result shows that the average weighted mean

is 2.05 and is “moderate”.

In addition, it also shows how each customer purchasing

pattern of the respondents was affected. The weighted mean of the

customer purchasing pattern variables were purchasing more often

(2.06), purchasing more products (1.98), availing the benefits of the

loyalty card (1.90), saving points in the loyalty card (2.22), Satisfied

with the loyalty card (2.08). The descriptive equivalent of the

respective variables are all “moderate”.

This goes to show that saving points in loyalty card which is

ranked as 1 was the main cause of other variables to improve such as

purchasing more often and purchasing more products which are

ranked as 3 and 4 respectively. The respondents wanted to earn more

points that made them maintain a certain amount of purchased every

transaction. This is a positive effect of the implementation of

55




frequency marketing program with regards to customer purchasing

pattern.

As to Customer Preferences

Table 2 shows the effect of the implementation of frequency

marketing program of 7-eleven specifically customer preferences.

Table 2Effect of Frequency Marketing Program of 7-eleven

In terms of Customer Preferences

n=50

Customer Preferences/ScaleH

(3)

M

(2)

L

(1) WM DE Rank

Loyalty18(54)

30(60)

1(1)

2.30 M 2

Quality Service19

(57)

31

(62)

1

(1)2.40 H 1

Availability of Service13(39)

35(70)

2(2)

2.22 M 4

Convenient18(54)

28(56)

4(4)

2.28 M 3

Promotions (Loyalty Card)11(33)

30

(60)

10(10)

2.06 M 6

Hangout Area/ Place of

Hangouts/Meeting

13(39)

31(62)

5(5)

2.12 M 5

AVERAGE WEIGHTED MEAN 2.23 MLEGEND:


3 2.34-3.00 High (H)

2 1.67-2.33 Moderate (M)

1 1.00-1.66 Low (L)

56




Table 2 shows one of the effects of the implementation of

frequency marketing program of 7-eleven which is the customer

preferences. The result shows that the average weighted mean is 2.23

and is “moderate”.

The table further shows how reasons for preference of the

respondents were affected. The weighted mean of the customer

preferences variables were loyalty (2.30), quality service (2.40),

availability (2.22), convenient (2.28), promotions (2.06), hangout

(2.12), referred by others (1.48), and no reason at all (1.06). The

descriptive equivalent of the respective variables are mostly

“moderate”, only one is “high” which is the quality service and two of

them are “low” which are the others’ referral and no reason at all.

This goes to show that the quality services, which was ranked 1,

provided by the 7-eleven and the loyalty of the customers which was

ranked 2 were greatly affected in the implementation of frequency

marketing program of 7-eleven. Many of the respondents thought that

the quality service of 7-eleven improved because of the

57




implementation of the frequency marketing program and that they

became a loyal customer to the business entity. Availability and being

convenient of the business, which were ranked 3 and 4 respectively,

were the other variables that are mostly affected. This means that the

customers are now preferring 7-eleven because of it being convenient

and available at all times.

Summary of Effect of Frequency Marketing Program of 7-eleven

The following table summarizes the effect of frequency

marketing program of 7-eleven in Burgos St., Dagupan City.

Table 3

Summary of Effect of Frequency Marketing Program of 7-eleven

Effect of Frequency

Marketing Program

Average Weighted

Mean

Descriptive

Equivalent

Customer Purchasing Pattern 2.05 MCustomer Preferences 2.23 MOverall Weighted Mean 2.14 M

LEGEND:


3 2.34-3.00 High (H)

2 1.67-2.33 Moderate (M)

1 1.00-1.66 Low (L)

58




The table 3 shows the summary of effect of frequency marketing

program in terms of customer purchasing pattern and customer

preferences. Both variables were “moderate” in descriptive equivalent

which means they are moderately affected by the implementation of

frequency marketing program.

59




Problems Encountered in the Frequency

Marketing Program of 7-elevenIn every process the problems are inevitable. These problems

could be major or minor depending on the operation of the business.

Customers of 7-eleven have encountered the following problems: Table 5 shows the problems encountered in the frequency

marketing program of 7-eleven as experienced by the respondents. Table 4

Problems Encountered in the Frequency

Marketing Program of 7-eleven

n=50

Marketing strategies/scaleH

(3)

M

(2)

L

(1) WM DE

Ran

k

Lost loyalty card

5(15

)

21(42

)

24(24

)

1.62 L 3

High points required for certain

item

8(24

)

30(60

)

12(12

)

1.92 M 1

Error in pin code

6(18

)

21(42

)

23(23

)

1.66 L 2

Defective card3

(9)

22(44

)

25(25

)

1.56 L 4

AVERAGE WEIGHTED MEAN 1.69 M

LEGEND:


3 2.34-3.00 High (H)

2 1.67-2.33 Moderate (M)

60




1 1.00-1.66 Low (L)

The mean of the variables were as follows; 1) Lost loyalty card (1.62),

2) high points required for certain item (1.92), 3) error in pin code

(1.66), and 4) defective card (1.56).

High points required for certain item and error in pin code,

which were ranked as 1 and 2 respectively, were the major problems

that were being experienced by the respondents. It shows there is a

need for further improvement when it comes to these variables.

The 7-eleven must either reduce the points required in order to

avail a certain item or lower the minimum amount needed to acquire

points. This is to keep their customers’ positive attitude in availing

items in exchange for points. Reducing the points required for certain

items will inspire their customers to avail more items. The same is

true with lowering the minimum amount required to earn points.

Lowering the minimum required amount shows that the customers

can now easily save points, therefore providing them opportunities to

acquire more items.

61




7-eleven must take an action with regards to having an error in

pin code such as forgetting the pin code and the pin code was

changed suddenly. They must provide service where the customers

can go to any branch of 7-eleven to seek help particularly in terms of

the problems with regards to the loyalty card.

Table 5Summary of Problems Encountered and

Proposed Alternative Measures

Problems

Encountered

Proposed Alternative

Measures

Implementation

High points

required for certain

item

• Reduce the

points required

to avail certain in

or

• Lower the

iniu

aount required

to earn points

• !he "ranch

ana#er

ust a$e a

petition to

their head to

ipleent

the proposed

easure%

Error in Pin Code • Resettin# the pin

code throu#h 7&

eleven ana#er

• !he "ranch

ana#er will

access the

62




in an' "ranch custoer(s

account to

reset its pin

code

Lost Loyalty Card • Retrievin#

custoer

account throu#h

the re#istered

phone nu"er

and providin#

new lo'alt' card

• !he "ranch

ana#er will

retrieve the

custoer

account and

trans)er its

in)oration

in the new

lo'alt' card%Defective Card • *i+in# the lo'alt'

card

• ,rovidin# new

lo'alt' card

• !he 7&eleven

personnel will

-+ the lo'alt'

card or

provide a

new lo'alt'

card

• .n providin# a

new lo'alt'

card/ the

63




"ranch

ana#er will

retrieve the

custoer

account and

trans)er its

in)oration

in the new

lo'alt' card%

Table 5 shows the summary of the issue with the highest rank

in each variable together with their proposed alternative measures.

This is to overcome the problems as experienced by the customers of

7-eleven.

64




Chapter V

SUMMARY, CONCLUSION AND RECOMMENDATIONS

This chapter presents the summary of findings, conclusion

based on the findings and recommendations drawn from the

conclusions.

The study attempted to determine the issues and concerns

alongside its practice. Results of the investigations, served as basis

for the formulation of alternative measures in enhancing the business

entity. The main that guided the researcher in this study and allowed

the researchers to collect data from the customers of 7-eleven.

Summary of Findings

Based on the gathered research, following findings were sought

as to:

1. Effects of Frequency Marketing Program of 7-eleven in terms

of:

a. Customer Purchasing Pattern

65




Earning points in the loyalty card (2.22), satisfied with the

loyalty card (2.08), purchasing more often (2.06), purchasing more

products (1.98), and availing the benefits of the loyalty card (1.90)

were ranked 1 to 5 respectively. The average weighted mean is 2.05

and is “moderate”. The descriptive equivalent of the respective

variables were all moderate.

b. Customer Preferences

Quality Service (2.40), Loyalty (2.30), Convenience (2.28),

Availability of Service (2.22), Hangout (2.12), and Promotions (loyalty

card) (2.06) were all ranked 1 to 6 respectively. The average weighted

mean is 2.23 and is “moderate”. The descriptive equivalent of the

respective variables were mostly “moderate” and only one is “high”

which is the quality service. The customers are now preferring 7-

eleven because of it being convenient and available at all times.

Based on the gathered data, the researchers found out that

Customer Purchasing pattern is more on moderate which means that

the effect of the frequency marketing program of 7-eleven have the

tendency to increase or decrease. The Customer Preferences of 7-

66




eleven when it comes to quality service is high because of the

availability, convenient, promotions (loyalty card) of 7-eleven that

customers are satisfied with overall variables of 7-eleven.

67




2. Problems Encountered in the Frequency Marketing Program of

7-eleven

High points required for certain item (1.92), Error in pin code

(1.66), Lost loyalty card (1.62), and Defective Card (1.56) were ranked

1 to 4 respectively. The average weighted mean is 1.69 and is

“moderate. The descriptive equivalent of most of the variable is “low”

while only the rank 1 was moderate.

Conclusion

The aimed of the study is to assess the effect of frequency

marketing program of 7-eleven as experienced of the customers of the

said business entity in order to know how the customer purchasing

pattern and customer preferences of the respondents were affected. It

also aimed to provide proposed measures to overcome the problems

encountered and to further improve their marketing strategy

specifically the frequency marketing program.

After the implementation of frequency marketing program,

several problems were encountered. Despite these difficulties, the

management of the 7-eleven never makes it a reason to stop the

68




business. The researchers also came up with measures to take to at

least minimize the problem and improve their marketing strategy.

The Researchers concluded that this study would help the

people engaged in the same kind of industry and others especially

business students. The study has a primary aimed which was to

assess the effect of the frequency marketing program of 7-eleven as

experienced by Respondents in order to know the how the customer

purchasing pattern and customer preferences of the respondents were

affected and provide its proposed measures. The frequency marketing

program particularly the “everyday reward card” of 7-eleven is a great

opportunity to promote their business, to provide more valued service

to customers and to enhance their own marketing strategy.Recommendations

Based on the findings and conclusions the researchers have

presented, the study set out the following recommendations:1.The proposed measures for the problems encountered by the

business as cited in Chapter IV can be used as a guide by the

branch manager to further improve their promotion strategies

focusing on frequency marketing program.

69




2.It is recommended for future researchers to pursue more similar

research study and the researchers highly recommend the

aspects that the group has not tackled or discussed precisely on

the study.3.The proposed measures can also be used by other branch of 7-

eleven and any related businesses to further improve their

promotional activities especially with frequency marketing

program.

70




BIBLIOGRAPHY

A.UNPUBLISHED MATERIALS

Sharp, et. al.1997 Loyalty programs and their impact on

repeat-purchase loyalty patternsKivetz and Simonson2002 Earning the Right to Indulge: Effort as

a Determinant of Customer Preferences

towards Frequency Program RewardsMaCorr2003 Understanding Customer Purchasing

BehaviorUncles, et. al.2003 Customer Loyalty and Customer

Loyalty ProgramDr. Pratyush Tripathi2003 Exploring Customer Purchase

Preference in special referenceto

Vegetable purchase

71










Ganesh

2004 Managing customer preferences in a

multi ‐channel environment using Web

servicesLi, et. al.2007 Traditional Purchasing PatternNelson2007 Customer Preferences in Vegetable

Retailing

B.WEBSITES

www.lib.ku.ac.th/kuis/2549/warakon-suk-all.pdfhttp://www.entrepreneur.com.ph/franchising/ministop-

philippines-a-true-business-partnerhttp://www.ecu.edu/cscas/anth/nuevosouth/upload/studying

customerbehaviorinretailstores-090623023217-phpapp01-

slideshare.pdfhttps://byronsharp.files.wordpress.com/2008/03/4025loyaltyp

rogs.pdf

http://www.knowthis.com/types-of-sales-promotion/consumer-

sales-promotionshttp://www.mbaskool.com/business-concepts/marketing-and-

strategy-terms/11917-frequency-marketing.htmlhttp://www.cleverism.com

72

http://www.lib.ku.ac.th/kuis/2549/warakon-suk-all.pdf



http://www.ecu.edu/cscas/anth/nuevosouth/upload/studyingcustomerbehaviorinretailstores-090623023217-phpapp01-slideshare.pdf



https://byronsharp.files.wordpress.com/2008/03/4025loyaltyprogs.pdf


http://www.knowthis.com/types-of-sales-promotion/consumer-sales-promotions


http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/11917-frequency-marketing.html


http://www.cleverism.com/

http://www.lib.ku.ac.th/kuis/2549/warakon-suk-all.pdf












http://www.cleverism.com/




http://searchcrm.techtarget.com/definition/loyalty-card-

programhttps://en.wikipedia.org/wiki/Convenience_storehttp://www.japan-guide.com/e/e2071.htmlhttp://pana.com.ph/filipinos-increasing-appetite-for-

convenience-spurring-convenience-store-growth/http://www.lib.ku.ac.th/kuis/2549/warakorn-suk-all.pdf

73

http://searchcrm.techtarget.com/definition/loyalty-card-program

















APPENDIX A

Letter to Conduct Study

74




APPENDIX B

Survey Questionnaire

Dear Respondents:

We would like to introduce to you our group in Business Administration at University of Luzon, Dagupan City, Philippines. We aredoing a short survey and the objective of this research is to collect dataabout the effect of implementation of Everyday Reward Card of 7-eleven at your organization.

This work is in accordance with methods promoted by University ofLuzon. The results will be made confidential and will be the asset of theuniversity.

Below is the questionnaire.

Thank you very much for participating in our study.

Respectfully Yours,

STEPHEN P. RAQUIDAN

Group leader

Part I

Name (Optional):_________________________________ Sex: ( ) Male ( )

Female Age: ( ) below 20 ( ) 21 – 30 ( ) 31 aboveMarital Status: ( ) Single ( ) Married Type of Occupation:( ) Self-employed

( ) government-employed( ) unemployed

75




( ) Student

Part II

Customer Purchasing Pattern

Direction.Please put a tick (√) on the box to determine the changes youexperienced after the implementation of Everyday Reward Card of 7-eleven.

3 – High

2 – Moderate

1 – Low

3 2 1I purchase more oftenI purchase more productsI avail the benefits of the loyalty cardI save points in loyalty cardSatisfied with the loyalty cardOthers Specify:______________________________ ______________________________

Customer Preferences

Direction.Please put a tick (√) on the box to scale your reason forpreference.

3 – High

2 – Moderate

1 – Low

3 2 1LoyaltyQuality service AvailabilityConvenientPromotions (Loyalty Card)

76




HangoutReferred by othersNo reason at allOthers Specify:______________________________ ______________________________

Part III

Direction.Based from your perspective, please put a (√) tick on the box toscale the problems encountered in the implementation of Everyday RewardCard of 7-eleven.

3 – High

2 – Moderate

1 – Low

Customer Purchasing Pattern

3 2 1Lost Loyalty card

High points required for certain itemForgot Pin CodeDefective cardProduct expirationOthers Specify:______________________________ ______________________________

Customer Preferences

3 2 1Other products are unavailableHigh priced productsCustomer Service7-eleven RegulationsCleanliness Ambiance

77




Others Specify:______________________________ ______________________________

“Thank You for your Cooperation! ”

78




APPENDIX C

Documentation

79




80




81




CURRICULUM VITAE

A Personal Data

Name: Stephen

P. Raquidan

Birthday: December 28, 1997Birthplace: Sta. Barbara, PangasinanFather: Mr. Florencio O. LustinaMother: Mrs. Marilou P. Lustina

Address: #53 Tuliao Sta. Barbara

,PangasinanNationality: FilipinoCivil Status: Single

B Educational BackgroundPrimary: Tuliao, Elementary School I

Tuliao, Sta. BarbaraSecondary: Daniel Maramba National High

School

Poblacion Norte, Sta. Barbara Tertiary: University of Luzon

Perez Boulevard, Dagupan City

82




CURRICULUM VITAE

A.Personal Data

Name: Sam Jordan F. CaguioaBirthday: July 02, 1995

Birthplace: Mangaldan, PangasinanFather: Mr. Mario P. CaguioaMother: Mrs. Virginia F. Caguioa

Address: 70 Mangin Dagupan City,

PangasinanNationality: FilipinoCivil Status: SingleB.Educational Background

Primary: West Central Elementary School I

Poblacion Oeste, Dagupan City

Secondary: Dagupan City National High

School Tapuac Dist., Dagupan City

Tertiary: University of LuzonPerez Boulevard, Dagupan City

83




CURRICULUM VITAE

A.Personal Data

Name: Joanne

Melissa C. Kho

Birthday: February 28, 1997Birthplace: Dagupan CityFather: Mr. Joselito S. KhoMother: Mrs. Judy Ann C. Kho

Address: 248 Brgy. Tonton Lingayen,

PangasinanNationality: FilipinoCivil Status: Single

B.Educational BackgroundPrimary: Saint Columban’s College

Lingayen, PangasinanSecondary: Saint Columban’s College

Lingayen, Pangasinan Tertiary: University of Luzon


84




CURRICULUM VITAE

A.Personal Data

Name: Elsa M. AysonBirthday: November 8, 1980

Birthplace: Lucao, Dagupan CityFather: Mr. Adolfo Salde E. AysonMother: Mrs. Elvira M.Ayson

Address: 315 Lucao District Dagupan City,


Primary: West Central Elementary School I

Poblacion Oeste, Dagupan CitySecondary: Dagupan City National High

School Tapuac Dist., Dagupan City


CURRICULUM VITAE

A.Personal Data

85




s

Name: Prince Edward V. De LeonBirthday: March 03, 1998Birthplace: Sipocot, Camarines SurFather: Mr. Arnold R. De LeonMother: Mrs. Beverly V. De Leon

Address: Blk. 5 Lot 23 Jewelville Subd.

Anolid, MangaldanNationality: FilipinoCivil Status: SingleB.Educational Background

Primary: West Central Elementary School IPoblacion Oeste, Dagupan City

Secondary: Dagupan City National High

School

Tapuac Dist., Dagupan City Tertiary: University of Luzon


86




CURRICULUM VITAE

A.Personal Data

Name: Leslie FerrerBirthday: October 13, 1996

Birthplace: Calasiao, Pangasinan

Father: Mr. Leonardo C FerrerMother: Mrs. Generosa C Ferrer

Address: #388 Lasip Bouquig Calasiao,


Primary: Calasiao Central Elementary

School ICalasiao Pangasinan

Secondary: Calasiao Comprehensive National

High School Calasiao Pangasinan


87




CURRICULUM VITAE

A.Personal Data

Name: Judy Ann D. CabutotanBirthday: November 06, 1997

Birthplace: Anonang, San Fabian,

PangasinanFather: Mr. Benjamin CabutotanMother: Mrs. Shirley Cabutotan

Address: 385 Anonang, San Fabian,


Primary: Anonang Elementary School Anonang, San FabianSecondary: Anonang National High School

Anonang, San Fabian Tertiary: University of Luzon


88




CURRICULUM VITAE

A.Personal Data

Name: Christine Dei N. DiazBirthday: December 29, 1997Birthplace: Angeles, PampamgaFather: Mr. Ponchito M. DiazMother: Mrs. Ligaya N. Diaz

Address: San Miguel Calasiao, PangasinanNationality: FilipinoCivil Status: SingleB.Educational Background

Primary: Calasiao Central SchoolCalasiao, Pangasinan

Secondary: Calasiao Comprehensive National

High School Calasiao, Pangasinan


89




CURRICULUM VITAE

A.Personal Data

Name:

Sharmine S. Joaquin

Birthday: December 20, 1996Birthplace: Sampaloc, Parańaque, ManilaFather: Mr. Diamante T. JoaquinMother: Mrs. Mary Grace S. Joaquin

Address: #371 Cablong Sta. Barbara

PangasinanNationality: FilipinoCivil Status: Single

B.Educational BackgroundPrimary: Cablong Elementary School

Cablong Sta. Barbara,

Pangasinan

Secondary: Payas National High School

mr - chapter 1-5 (revised)

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