Sari-sari Store in Barangay Poblacion, Tabango, Leyte: The Business Growth and its

Marketing Practices

A partial fulfilment in the subject Practical Research

Submitted to

Ms. Jesamie Sereno

Subject Teacher

Submitted by

Duruha, RJ Dave

Barro, Camille Faith

Valiente, LJ

Juanir, Jay Ann

Catarinin, Wilson

TABANGO SENIOR HIGH SCHOOL- STAND ALONE

Tabango, Leyte

2019
 CHAPTER I

Background of the Study

As the years passed by, the endless needs and wants of people are still growing. Most of

the people spend their money in buying any goods or products for the fulfillment of the daily

needs in their lives.

As you walk through in the Philippines especially in the rural areas, you will often come

across a “sari-sari store”. It’s a family run convenience store found on almost every street corner

in the Philippines. Sari-sari in English means “variety” or “everything”. Those kind of stores are

not only a one stop shop providing locals with everything from daily food necessities to cleaning

supplies but they are a colorful, cultural icon that brings together the community. These stores

are a big part of the Filipino community and are often attached in front of their homes.

A sari-sari store is a small neighborhood retail shop that caters to members of the

community. The range of the customers must be limited to the immediate vicinity. The store

usually carries basic goods such as canned food, instant noodles, coffee, soda and other things

that Filipinos get on a daily basis. They also sell candies, chips, and beer, but can have literally

anything that commodities the community needs.

Using an agent-based rational choice approach, this paper attempts to explain why sari-

sari stores persist, and seem to defy neoclassical profit maximization.

Apart from the most affluent communities, the sari-sari store is a constant feature of

residential neighborhoods in the Philippines both in rural and urban areas, proliferating even the

poorest squatter communities. About 93% of all, sari-sari stores nationwide are located in
residential areas (Bonnin, 2004;McIntyre, 1955), and are typically operated for a portion of the

owners house (Chen, 1997;Bonnin, 2004; McIntyre, 1995; Selverio, 1982).

Nearly three decades later, Silverio wrote, “No single socioeconomic institution in the

country today boasts greater numerical presence in the Philippine community than the sari-sari

store. Sari-sari stores dot the neighborhood landscape so profusely that sometimes only a single

house separates one from another” (Silverio, 1982). His observation is just as true today as it was

twenty-five years ago. In a more recent study, Bonnin (2004) observed that it was not unusual to

find four or five stores within the same short block, and in one instance three stores were located

side by side in adjacent homes.

In a small town of Tabango, Leyte, there were people who are engaged in a small

business which is the “sari-sari store” that becomes one of the Tabango’s common business for

its very household good at affordably-portioned quantities and it’s been part and parcel of the

daily lives for the average Filipinos. Any essential household good that might be missing from

one’s pantry – from the basic food items like coffee and seasonings, to other necessities like soap

and matches are most conveniently purchased from the sari-sari store. The store is often attached

to or part of the owner’s house and it may also be a freestanding store. Tabangohanons build

their own business to earn income to sustain their daily needs and other expenses.

The fact that many sari-sari stores are clustered in the same area, it leads to a serious

problem that questions us if there’s an income-generating activity happens. These stores carry

the same type of goods, charged similar prices for the goods (Bonnin, 2004), and therefore

compete-based on their location. However, the numerous competitors operating in the same

neighborhood limits their market share. The purchasing power of potential customers are low,
and therefore, the potential markets of retail goods as a whole is likely to be small. Indeed store

owners recognize that excess competition is a problem (Bonnin, 2006), and many sari-sari store

owners claimed were “just breaking even” and not making any profits (Bonnin, 2004).

This study aims to know what are those factors influencing the growth of sari-sari store

businesses in Tabango, Leyte. The researchers also aim to find answers on how the businesses

are being sustained and maintained despite of the growing business of sari-sari store and at the

same time the marketing practices sari-sari store owners do to get through with their competitors.

This paper draws on a quantitative work of Accountancy, Business and Management – 12

students of Tabango Senior High School-Stand Alone that aims to know the rate of the people

who are engaged in the business sari-sari store here in Tabango, Leyte. The researchers need to

know how many sari-sari store owners are prone to success and prone to failure to identify

whether the business is generating income or not.

Statement of the Problem

This study aims to determine the business growth and the marketing practices of “sari-

sari stores” in Tabango, Leyte. Due to the ongoing increase rate of sari-sari stores, the

researchers were having curiosity about the sari-sari store owners if they were generating income

or not. If there business is in a good condition or it is prone to bankruptcy.

This study sought to answer the following questions:

1. What is the profile of the respondents as regard to their:

1.1 Age

1.2 Educational Attainment

1.3 Estimated Monthly Income

2. How many residents living in Tabango, Leyte are engaging in the said business?

3. What are those marketing practices and strategies sari-sari store owners do to get through with

their competitors?

3.1 What are the basis of “sari-sari store” owners in terms of pricing the goods?

3.2 How many “sari-sari stores” are prone to success and bankruptcy through getting

their rates?

3.3 Is the number of competitors had greatly affects the income generated by a “sari-sari

store” owner?
Significance of the Study

This study is to determine the growth and the marketing practices of Sari-sari Stores in

Tabango, Leyte and this study was developed also to know whether the business of Sari-sari

store is really profitable.

This study will significantly affect and help the following:

 Sari-sari Store Owners- this study will give information to the owners of Sari-sari store

about the current status or happenings of their business whether it is generating income or

not, tips on how to be successful one and some preventions that they may apply to avoid

bankruptcy.

 Community- This study will give them insights about the nature of this business. This

will also give information to the community that will enlighten their perceptions about the

business. This kind of business will be helping the community to those people living in the

area who plan to have a business like Sari-sari Store in order for them to have a better

preparation when starting the said business.

 Government- this study will be beneficial to the government for it gives insights about

the Sari-sari Store business as one of the factors affecting the economic growth. They can

regulate its on-going increase and operations, and also the business will be getting permits

to have payments for it to be legal and with that it will serve as taxes as well for the funds

of the community’s project.

 Future Developers – This will become a source of information for their research. This

study will also serve as the basis in the application to another system which details

information to further enhancement of their study.

Scope and Delimitation

The proceeds of this study is focused on the phenomenon growth of “Sari-sari Stores” in

Tabango, Leyte that has a main concern of knowing the marketing practices behind the success

of sari-sari store owners, factors affecting the income of a particular sari-sari store, and those

sari-sari stores that are prone to bankruptcy.

This study will be conducted in Tabango, Leyte whose respondents are those people living in the

area who were engaged in the said business, the sari-sari stores. These involves determining of

the owner’s personal information, the history behind the business, and even their objectives for

doing this kind of business.

This study focusses on sari-sari stores as a simple step to make a conclusion about the business

and if it is really profitable. This study limits its scope in the other obligations and activities of

some successful owners that are being interviewed by the researchers.

Conceptual Framework

This framework elaborated the study of sari-sari store in Tabango, Leyte: the business

growth and its marketing practices. The independent variable of this study are the profile of the

sari-sari store owners and the marketing strategies they implement within the operation of their

business while the dependent variable is the business growth as well as the capacity of the

business to continue its operation in the market and continue to compete with its competitors.

The researcher will use survey questionnaires in gathering data, and will analyse and interpret

data thereafter.
 INPUT PROCESS
OUTPUT
Data Gathering Through Survey
Questionnaires Business Growth
Sari-sari Store Owners
Analysing and Interpreting the Capacity of the business to
Marketing Practices Data Collected compete and continue its
operation in the market

Figure 1: Framework showing the flow of the research entitled Sari-sari Store in Tabango, Leyte:
The Business Growth and its Marketing Practices.
 CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter presents the different researches about sari-sari store in Tabango, Leyte: the

business growth and its marketing practices. This chapter highlights its theme based on the

different literature sources as indicated by the literature review.

Related Literatures and Studies

It cannot be deny that the neighborhood sari-sari store is already a part of the daily life of

average Filipino (Kirhat, 2007). It was estimated by a study of Bonnin in 2004 that about 93

percent of all sari-sari stores nationwide are located in residential areas and are typically operated

from a portion of the owner’s house. Anything you might have missed in your regular trip to the

Department Stores – from basic food items to other necessities like deodorant, matches, powder

and even mobile phone load – is most conveniently purchased from the sari-sari store nearby at

affordably portioned quantities, sometimes even on credit.

As early as the 1950s, residential areas in Metro Manila exhibited “a widespread

scattering of tiny neighborhood stores,” the most common of which is the sari-sari store

(McIntyre, 1955). He describes these stores in greater detail: “the store is merely an open, stall-

like recess on the lower floor of a dwelling.”

Given how a sari-sari store works, these retail stores are patronized by people since it

provides convenience to all, and in today’s generation, a sari-sari store is almost in every corner

of the community. More Filipinos are fascinated to the sari-sari store community, which is part

of the retail industry, since it is one of the fastest and easiest business venture they can get into;

easy to manage, home-based and has low operating cost. Thus, continuously improve the
economy (Lacamiento, 2013), even the most destitute group of squatters’ shacks, have a

surprisingly large number of these stores.”

A study by Parilla (2015) presented that not only in urban but also rural places has this

increase in number of sari-sari. In addition, these stores carry the same types of goods, charge

similar prices for these goods and therefore compete based on their location (Bonnin, 2004).

Market research studies by AC Nielsen report that the number of sari-sari stores nationwide

grew by an estimated 88 percent between 1997 and 2000 (Bethge, 2003), 14 percent in 2002

(Bonnin, 2004), 13 percent in 2003 (Capistrano, 2005), and 7 percent in 2004 (Amojelar, 2006).

These studies confirm the observation that the sari-sari store has remained popular as a

microenterprise resulting in a growing flow of new entrants.

Sari-sari store industry has very high competition because of the high threat of new

entrants operating in the market. Since sari-sari store is still a popular business given that the

ratio now is one sari-sari store for every 100 people (Castro, 2016) and that it covers 30% to 40%

of the total retail sales in the Philippines (Lorenciana, 2014). However, it is becoming hard for

sari-sari stores to stay in the competition, especially if they are located in rural community

because stores are multiplying, getting near to each other, and market area is getting small for

each retailer. Products can be easily substituted because a single sari-sari store may also have

similar products with the others because those may be in demand, and customer loyalty is low

because other may choose those that are more convenient to them. Meanwhile, the threat of new

entrants is high due to low barrier to entry such as capital and legal requirements (Jurevicius,

2013). Regalio, in his article in Insight Philippines (2016) said, “Give a Filipino thousand pesos

and he probably will use this sum as a start-up capital for a small retail business.” From that

statement, it can be concluded that a small amount of capital is a good start; there may be
chances, an owner’s capable neighbour may be attracted when the store is earning and open his

own the next day. For the legal requirements, we may find other sari-sari stores unregistered. In

fact, the BIR increases their efforts in searching those unregistered small scale-businesses

including sari- sari stores (Tempo Online, 2017).

Indeed, store owners recognize that excess competition is a problem (Bonnin, 2006), but

despite excess competition, price markups remain high (Chen 1997), and sari-sari stores

continue to grow, accounting for 90 percent of the country’s total retail outlets (Olarte and Chua,

2005).

Along this line, economist considered marketing as having significant role in the business

process. Any business requires proper marketing for it to grow and successfully reach its target

audience, buyers, and the people whom such products are intended for (Aveta Business Institute,

2013). Marketing strategy also allows you to have a tool to increase your retail sales and helps

you become more effective in doing efforts because you know who you are talking to in the first

place (Phibbs, 2017). Marketing for small scale businesses like sari-sari stores is important

because low businesses like these are generic, which need to be known for people to patronize

and gain sales. The success of these businesses depends on the marketing ability of the owners

and marketing efforts to keep the business in the competition (Sims, 2013).