CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

With the continuous improvement of today’s society in every aspect

including technology, education and preferences, there comes an increase in the

variety and expectation of people’s demands. In the business world, the market

consisting of the people who buy the products or services and those who are

likely to buy them is an important aspect in order for the firms to prosper in their

field. Because of these, each firm has their distinct ways on how to attract the

market which is what they call the marketing strategy.

According to Kotler (2014), marketing’s main goal is to satisfy the needs of

the customer particularly, the target market. It also involves understanding and

identifying the trends in the market that affect the growth of the business. It also

serves as a basis of serving the best and how well a company can promote or

advertise their products and services.

Furthermore, the desired effect of marketing strategies can be seen

clearly in the result of a careful study of the production process, the existing

competition within the area and service quality of the business that also manifest

in the increase or decrease in the number of customers who patronize the

product and service again and again. These changes are characterized by

customer satisfaction which became the main goal of all the prospering

businesses in order to achieve their objectives. Customer satisfaction is the

 2

ability of firms to meet the needs and demands of the market and creating a

relationship between the two. This enables better responses and

recommendations thus, more people will flock the area. Therefore, there is a

need for maintenance of customer relationships which demands more thought-off

ideas for improvement and development.

Businesses that offer food and services include fine-dining restaurants.

This kind of restaurants is sometimes considered as luxurious for it requires more

money than the usual restaurants and fast-food chains. However, the services

and the quality that they offer is a lot better compared than those of fast-food

chains. As a result of that, the customers are becoming more willing to pay as

they do not only pay for the food, but also for the service.

However, not all people prefer to eat in fine-dining restaurants for many

reasons. One of these reasons is the price because not all people are willing to

pay a lot for food. Moreover, because it is too extravagant for some that they

prefer to eat in simpler restaurants rather than fine-dining restaurants. However,

in order for these entities to avoid failure because of the reasons stated, they try

to determine the aspects for success and which opportunities are crucial for them

to stay ahead of the competition and make importance of their customers. In the

province of Batangas, there are many existing fine-dining restaurants. One of the

ways to stay afloat in such competition, effective marketing strategy which

primarily aims to maintain good business status and satisfactory profit levels

must be applied.
 3

There are other factors which continue to affect fine-dining restaurants

and their business operations. There is a need to determine or assess the

marketing strategies in order to fill in the gaps of past researches and to satisfy

the curiosity of the researchers of possible future plans or contingencies for the

marketing strategies. The study also aims to provide various entities more

conclusive bases for the application of their marketing strategies. Through

presenting the pros and cons of the marketing strategies currently applied by

many fine dining restaurants, they can give more importance to the production,

competition and service quality. All of these efforts play a big role in the

achievement of the business status every entrepreneur wishes for.

 4

Theoretical Framework

Determine the best

strategy that can
bring the resources
in proper channel
STRATEGY
according to firm
capabilities

Identify the
resources and
classify them.
COMPETITIVE
Perform SWOT ADVANTAGE
analysis for absolute Investigation of the
utilization of resource gap
resources remained and fill
them with proper
Access the measures
potentiality of the
resources as per CAPABILITIES
capabilities

Identify the
capabilities of the
firm and plan the
resource percentage RESOURCES
for every capability

Figure 1
Resource-Based Theory
The Resource-Based Theory (2014) of Barney et al., commonly known as

RBT, is a multidimensional framework which looks into 4 perspectives: domains,

characteristics and uses of market-based resources and relationship in the

“marketing strategy”. This theory determines the business’ edge to its

competitors. Moreover, it also focuses on managerial attention and its

 5

relationship with the company’s internal resources in order to develop and

conceptualize the advantages of the firm compared to other businesses. It

follows and takes note of the rules and disciplines of economics, ethics, law,

management, marketing, supply chain management and general business. In

this, it involves choosing the best strategy that best makes use of internal

resources compared to external resources.

In the presence of marketing strategies in this study, the variables

included can be associated with the factors included in the Resource-based

Theory. The competitive advantage for the competitors, internal resources such

as service quality, prices and quality of the products and resources for the

supplies that are needed or available for the business consumption. Every

variable contributes to the effectiveness of various marketing strategies.

The process that this theory proposes can be interpreted as an

interconnection of the variables presented in the study. Certain factors can affect

the three variables in the framework. These effects can be fully witnessed after

the execution of the marketing strategies exploited by fine dining restaurants in

Batangas. Through this study, the researchers will be able to assess how these

marketing strategies and their effects could determine the business performance

of fine dining restaurants in Batangas. The framework only shows that everything

that runs in the business is associated with the marketing strategies that they

often use.

The Resource-Based Theory of Barney et al. has contributed to this study

by presenting a lot of concepts that make it much easier for many people to
 6

understand the research objectives and support the conclusions to be presented

by the study. This theory represents a big portion of help to the researchers in

fully analyzing how marketing strategies work in accordance with the said

variables.

Conceptual Framework

INPUT PROCESS OUTPUT

Marketing strategies Questionnaire Effective marketing
employed by distribution to strategies in selected
selected fine dining customers/employees/ fine-dining
restaurants in managers. restaurants.
Batangas City.
Assessment or Proposed plans for
determining of criteria the improvement of
for the strategies. the business to be
given by the
researchers.

Figure 2
Research Paradigm
Figure 2 displays the needed resources or the input, the means of getting

the data or the process and the desired goal or output of the study. In the first

box, getting the information from past researches and other resources such as

books or online sites and journals must be done. The research would not be

complete without the data or responses that will be gathered through the

questionnaires on selected fine dining restaurants in Batangas. Thus, finding or

 7

fulfilling the goal of assessing the marketing strategies that are deemed to be

effective and find out future plans or actions meant for the improvement of the

business and preparation for future trends and tendencies that may affect the

environment concerning the business operations and transactions.

The conceptual framework makes use of all the needed resources and

materials, the process that needs to be undertaken and finally, getting the final

output. The research aims to find out or assess the marketing strategies and

establish a concrete criteria or basis from which these will be based. Thus,

getting the trusted and most used strategy used by selected fine-dining

restaurants through proposed suggestions and recommendations by the

researchers for the marketing strategies of fine dining restaurants in Batangas.

Statement of the Problem

This study aims to assess the Marketing Strategies exploited by Selected

Fine Dining Restaurants in Batangas.

Specifically, it seeks to answer the following questions:

1. What are the marketing strategies applied by fine dining restaurants in

Batangas?

2. What are the criteria of these enterprises in choosing the marketing

strategies?

3. How do these marketing strategies affect the following:

3.1 Production;
 8

3.2 Competition; and

3.3 Service Quality?

4. Are there significant differences among the effects of marketing strategies

to the three components of business performance?

5. Based on the results, what are the proposed plans for the improvement of

the business to be given by the researchers?

Hypothesis

There are no significant differences among the effects of marketing

strategies to the three components of business performance.

Scope, Limitations and Delimitations of the Study

This study covers the marketing strategies of the selected fine dining

restaurants in Batangas and how they affect the components of business

performance, specifically, production, competition and service quality. It will

also discuss the criteria of these enterprises in choosing marketing strategies

including the differences among the components stated. This study also aims

to find out their proposed plans for improvement based on the answers to the

prior questions.

This research is limited to the assessment of the marketing strategies and

in determining the most effective strategy to be used. It seeks to determine

the pros and cons of the marketing strategies applied by the entities and their
 9

effect to the variables included in the study. Only the three given components

of business performance, mainly production, competition, and service quality

will be given importance. Furthermore, it will be conducted within Batangas

using questionnaires to be distributed to sixty (60) respondents randomly

chosen by the researchers that fully know the state of their marketing

strategies like managers and specific staff.

The result of the study is delimited to fine dining restaurants outside

Batangas. Moreover, it does not discuss how each entity carries out the said

marketing strategies. Also, it will not discuss the other components of

business performance. Other factors that can be affected by the marketing

strategies applied by the fine dining restaurants are also excluded in the

parameters of the study. Furthermore, other types of businesses are not

included in this research.

Significance of the Study

The findings of this study will prove useful to the following entities:

Business owners. This study will be helpful to business owners in

ensuring the desired effect of the marketing strategies to the business profit.

Marketing managers. The research conducted will be essential to them

in determining the most effective marketing strategy and developing new

techniques that will suit the market in attracting customers.

 10

Employees. Through this research, employees will be able to gain

knowledge and skills in carrying out the chosen marketing strategies of the

business.

Potential customers. The study is significant to potential customers in

terms of evaluating the pros and cons of the marketing strategies and how

these affects their opinions.

Regular customers. The results of the study would benefit regular

customers in their continuous patronization of the selected fine dining

restaurant.

Food critics. The conducted research will be essential to food critics in

terms of judging fine dining restaurants in their implementation of marketing

strategies.

Future researchers. The findings of the study will be useful to future

researchers as references for related studies that they will be conducting.

Definition of Terms

For more vivid understanding, the following terms are defined conceptually

and operationally:

Business Status. Sum total of an entity's legal capacity, duties, liabilities,

rights, and standing (http://www.businessdictionary.com/definition/status.html).

 11

In the study, this is affected by the different decisions made by the entity in

the formation of their marketing strategy.

Competition. This emphasizes mostly on the competitive surroundings that

contribute to varied dimensions of rivalries (Dube, Linganiso, and K, 2015) .

In the study, this refers to the way a firm sees others in a certain field like

that of fine dining restaurants in order to survive in the corporate world.

Criteria. Something that is used as a reason for making a judgment or a

decision (Merriam Webster).

In the study, this is the basis used by the researchers for further analysis of

the marketing strategies used by fine dining restaurants.

Customer. Someone who buys goods or services from a business (Merriam

Webster).

The researchers considered the customers as the clients of fine dining

Restaurants in Batangas and are essential to the establishment of conclusions of

the study.

Fine-Dining Restaurant. This is the type of restaurant that offers the finest in

quality, service and atmosphere, usually unique in their menu and restaurant

design (Motsenko, 2015).

In the study, it refers to the entity that will be assessed by the researchers in

terms of their marketing strategies.

 12

Marketing. The activities that are involved in making people aware of a

company's products, making sure that the products are available to be bought

(Merriam Webster).

In this study, marketing is defined as the plans or activities applied by the

business for the achievement of its objectives.

Marketing Strategy. A marketing strategy is a business's overall game

plan for reaching people and turning them into customers of the product or

service that the business provides

(https://www.investopedia.com/terms/m/marketing-strategy.asp).

In this study, marketing strategies pertains to the scheme exploited by the fine

dining restaurants and are the main focus of the researchers in the current study.

Production. This refers to the process of creating utility of goods or services

(Wijetunge, 2016).

In the study, it refers to the way the respondents increase or decrease the

supply of goods in accordance to the marketing strategy used.

Service Quality. It makes the customers satisfied and build their behavioral

intentions after receiving right treatment (Shahzadi, et al.,2018).

In the study, this is what fine dining restaurants aim in the execution of the

marketing strategies.