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CHAPTER 1

THE PROBLEM

Introduction

Milk tea, fruit tea and other cold beverages- who do not want these nowadays? These

certain trends have always been the current generation’s favorite. Milk tea and its family of

bubble teas, have been there across the world in various forms. It was in Taiwan where the

most popular style of milk tea originated. Until it evolved and took the world resulting for the

tea industry to explode because of popularity and attention it has since then.

Vigan City is the best-preserved historic place in Asia. The city offers series of

memoirs from the history. From the cobblestone streets, Spanish-styled houses, an old

ambiance, the iconic Calesa and more. The city also serves locals and tourists the best-

serving food like Empanada, Longganisa, Sinanglao, Poki-poki and many more. However,

Vigan is not just about the classic food and places but fast-food chains and new generation

businesses have started taking over the city. This includes teashop businesses. Business

owners have already established their own tea business shops in different parts of the place.

Some even have the “Vigan touch” in their buildings and the ambiance is still as classic as

Vigan. What makes it a more of a jackpot, Biguenos, it may be students, workers or aged

enjoy the classic taste of milk teas. Milk tea shops are definitely a hit in the city. Every

business has this specific target. It is to entice and retain customers.

The lone purpose of a business is “to create a customer”. Customers are the lifeblood

of a business. They run the business and it depends on them if a business to gain profit or

loss. A business clearly depends on its customers. Organizations are nothing without the

consumers because customers are the very reason why a premise exists. It is not only about
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for the business to gain profits and have a consistent or higher sale but to create great

customer relationship and improve the customer service and satisfaction.

Customer retention refers to the activities and action companies and organizations

take to reduce the number of customer defections (Galetto, 2015). In marketing, it is the

process of engaging existing customers to continue buying products or service in a business

(Patel, 2018). The capability of a business in creating and maintaining customer relationships

to get their trust in the brand or product as business is marketing is an important factor in

retaining customers.

Among academics and businesses, customer retention is a popular topic because of

the discovery of its overall effects on firm performance and profitability (Vavra, 1992; Parida

& Baksi, 2011). It determines the lifeline of the business. Having and not having customers is

a win and lose situation for the business. Since customers are known to be the people buying

in your business, they really are important factors affecting the business’ performance and

profitability. The business definitely relies on them alone and what they have to do is to

consider the concept of customer retention.

Customer retention is an important tool in the profitability of the business. Enhancing

loyalty and competitive advantage comes from a strong customer relationship by a

frictionless customer experience and customer-centric standards. (Verhoef, 2007; Lombard &

Nyadzayo, 2014). Customer retention is needed to have an edge against competitors. It is

because not only a business just has customers but it is guaranteed that their loyalty is in the

business alone.

Effectiveness, defined by Oxford Languages, is the degree to which something is

successful in producing a desired result. It is most likely synonymous with the word

“success.” Effectiveness is the extent to which objectives are attained. The focus of
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effectiveness is not on cost, but on identifying the right activities and performing them on

time. A highly effective organization pays close attention to its strategy and goals in order to

achieve the firm's long-term and tactical objectives. According to the article released by

Accounting Tools, 2022, effectiveness is considered as "doing the right thing" and is a critical

component of business success.

A strategy is something that separates your business from another businesses.

(Priority Metrics Group, 2016). In an article by Chron, 2020, the article stated that once your

strategy is completely executed, you may assess its overall management success by asking

how well it met the objectives you established with the resources you provided. You must

evaluate where your strategic plan failed if it did not meet its objectives or consumed more

resources. If the strategy was not linked with the company's strengths or the objectives were

not reachable, the plan's performance may fall short of expectations. In any cases, completing

a strategic plan places your firm in a new scenario, and doing a review allows you to continue

with either an effective strategic plan or one that incorporates improvements to avoid past

mistakes.

With all of these, investigating about the customer retention strategies of the milk

teashops in Vigan will be the focus of this study. These strategies define the sales of these

shops amidst the tough competition in the city. This study aims to know the different

customer retention strategies of milk teashops and its level of effectiveness. This will give

awareness to the organizations about what is needed to be improved the business’ approach to

customers and will give them data whether their implemented strategies are serving its

purpose. It is not just about the business owners but also for customers to know the strategies

that hook them and help them in deciding which milk teashops to go.
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Statement of the Problem

The study seeks to find out the customer retention strategies that are being

implemented by the milk teashops in Vigan City. Additionally, it also investigates the level of

effectiveness of these strategies.

Specifically, it seeks to answer the following questions:

1. What is the profile of the milk teashops in Vigan City in terms of;

1.1. Business Profile

a. Ownership,

b. Years in existence,

c. Number of workers,

d. Start-up capital, and

e. Average annual sales?

1.2. Management Profile

a. Age,

b. Gender,

c. Civil Status,

d. Educational Attainment,

e. Years in Business,

f. Administrative Experience, and

g. Trainings Attended?
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2. What are the customer retention strategies implemented by the milk teashops

in Vigan City?

3. What is the level of effectiveness of the customer retention strategies

implemented by the milk teashops in Vigan City in terms of;

3.1. Awareness,

3.2. Accessibility,

3.3. Dependability,

3.4. Affordability?

4. Is there a significant relationship between the profile and the level of

effectiveness of the customer retention strategies of the milk teashops in Vigan

City?

Scope and Delimitation

The focus of the study is on determining the customer retention strategies and its level

of effectiveness of the existing milk teashops of Vigan City. This will involve an interview to

the managers of milk teashops on what are their strategies in retaining customers. The

number of milk teashop managers that will be interviewed is limited only to milk teashops

located at Vigan City and delimited only to managers that will grant the request of the

researchers for an interview. This study will take place in Vigan City for the year 2022.

This research is quantitative - qualitative descriptive – correlational study. It will also

involve an interview to the customers to evaluate the level of effectiveness of the customer

retention strategies of milk teashops. The effectiveness of these strategies will be measured

based on the following criteria: awareness, accessibility, dependability, and affordability.

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The respondents of this study will be the managers of the milk teashops businesses in

Vigan City. The customers of these milk teashops will also be one of the populations of this

study. The respondents of this study will answer the data gathering instrument that will be

formulated by the researchers. This data gathering instrument will be subjected for further

validation.

Frequency distribution and percentage, Mean, and Pearson product moment of

Correlation will be the statistical tools to be used in treating the gathered data. Purposive

sampling will be utilized to relative to the population of the study.

Theoretical Framework

For better understanding of the study, related literature and studies are presented as

background and as bases for the framework of the study.

On Customer Retention Strategies

The following are the previous related studies about customer retention and customer

retention strategies that serves as guidance for the researchers in conducting the study.

A study on “Customer Retention Strategies in Consumer Durable Goods,” written by

Krishnan & Govindarahan (2013) is a descriptive study which deals with the examination of

the factors which gives contribution and influence to customer retention. Through the

questionnaire method, Chennai customers as the subject of the study, the researchers have

found out the following answers to this research topic. It was tackled in their study that

maintaining regular interaction with customers are found to be not important for improving

customer retention brands but rather improve its company image. Building a business'

company image will make the customers repeat purchasing products in your business. This is
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the main customer retention strategy being investigated in the study. Meanwhile in LG brand,

it retains its customers by selling variety of product items.

Any increase in any variable will substantially lead to increase customer retention. It

also shows that service quality attributes are positively related to customer retention but if

tested as an individual parameter they are not significant in explaining the level of retention.

The tangibles, reliability, responsiveness, assurance and empathy are positively related to

customer retention. In quality service, some have tried to provide quality service but there is

still room for improvement because of the changing environment and technology. The

relationship harnessed could be used to ensure efficient and timely service delivery in the

public health facilities as reflected by Daniel (2016).

Scarff (2017) points out the importance of customer retention and it was highlighted

through understanding CLV, referrals and cost efficiency. Consistency, competition and

customer satisfaction, these are the challenges they found out. There are three elements that

are essentially positive outcomes that the case study dealership has succeeded in a result of

placing an importance on keeping their costumers loyal and these are cost efficiencies, the

lifetime value of the customer and the implications of referrals were among the elements

highlighting the importance of practicing customer retention in a car dealership. The

dealership restricted by processes set out by their manufacturing partner that may put the

dealers’ relationship with the costumer at risk and ultimately affect customer satisfaction and

it also provides the ability to pre-empt potential defection. This case study dealership takes a

consistent, long-term perspective that looks to ensure that their customers return repeatedly.

Findings of Nishal (2015) aimed to increase the understanding of customer retention

by investigating a service company able to improve their customer retention through

customer relationship management. This research found out that in order to create customer
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retention, the model of Porras i.e. by Christopher, Payne and Ballantyne is one of the ways.

The strategy applied to build the customer relationship can be summarized as communicating

with the customers, arranging customer group meetings four times a year, surveying once a

year, collecting customer feedback and keeping in mind that face-to-face communication is

important. This strategy found out that this strategy is effective as customers had positive

feedbacks.

According to Vavra, (1992) & Kumar (2010) & Roberts-Lombard & Nyadzayo

(2014), nurturing relationships and service quality can help to retain customers and even with

the success of the business. Customer relationships is the connection between the business

and the current and potential customers. This is significant, as it will keep the customers on

coming back to the business because they are comfortable with the business and its staff. In

addition, giving them quality service is an important factor since a business should satisfy the

customers. It is one of the primary goals of a business- to provide the customers quality

service. It may be in serving the best products, rendering good service, in the business

establishment itself or in the way the crew gets along with their customers.

In some studies, maintaining interaction with customers is one of the reasons in

improving customer retention in audio brands but it can be improved more if a company

build its company image to the customers. It is because the quality of relationships gives a

direct impact on customer retention. It is also stated in previous studies to allocate more

resources in customer retention. This gives an impact to the sustainability of the business.

On Effectiveness

The following are the previous related studies about effectiveness that serves as

guidance for the researchers in conducting the study.

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An organization consists of different people with different roles. If these people fill

their respective job effectively, there is no question that an organization will succeed. One of

the positions that is most important in an organization is the manager. The manager is the

captain of the ship. If the manager is effective, the organization soars high, according to Page

(2015). The role of management in the economic society cannot be overemphasized.

Management resources have to be put into productive units to accelerate growth and

development. Management is the process of guiding the development, maintenance, and

allocation of resources to attain organizational goals. Managers are the people in the

organization responsible for developing and carrying out this management process.

Management is dynamic by nature and evolves to meet needs and constraints in the

organization’s internal and external environments. In a global marketplace where the rate of

change is rapidly increasing, flexibility and adaptability are crucial to the managerial process.

This process is based in four key functional areas of the organization: planning, organizing,

leading, and controlling. (Role of Management, 2013)

Managers are really important in order for a business to succeed. Managers are crucial

part of an organization because they are the one who drives the organization to its desired

path. According to the study of Gutierrez, Pura, et.al. (2014), with the title Business

Organization and Management, there are four specific functions of a manager; planning,

coordinating, directing, and controlling. Planning involves a constant reviewing of future

requirements in order to know what to do today. It is a continuous process and emphasizes

prevention rather than correction of delays. Thus, the essence of planning is to remember the

value of time, the virtue of patience, and the joy of originating. Coordinating implies the

smooth working together of the different composing elements. It aims toward a perfect

meshing of, or a harmonious adjustment among the elements employed. Coordination means

concurrence in purpose and performance to secure harmony in action towards a common end.
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Directing means pointing of all efforts toward the known objective. Direction gives guidance

and points out the course to be followed. Control includes the restraining, checking, and

motivating influences exercised by the management. Control requires a knowledge of what is

being done, what should be done, and what to do in order to rectify unsatisfactory conditions.

Control keeps the activities of an enterprise within their proper channels.

One of the jobs of an organization’s manager is to create and implement a strategy,

based on the article The Office of Strategic Management by Kaplan & Norton (2015).

Horwath (2020) defined strategy as the intelligent allocation of resources through a unique

system of activities to achieve a goal. Simply put, strategy is how you plan to achieve a goal.

A strategy is something that separates your business from another businesses. (Priority

Metrics Group, 2016).

Other than creating and implementing strategies, manager’s job is also to evaluate the

effectiveness of the strategy. Effectiveness, defined by Oxford Languages, is the degree to

which something is successful in producing a desired result. It is most likely synonymous

with the word “success.” Effectiveness is the extent to which objectives are attained. The

focus of effectiveness is not on cost, but on identifying the right activities and performing

them on time. A highly effective organization pays close attention to its strategy and goals in

order to achieve the firm's long-term and tactical objectives. According to the article released

by Accounting Tools, 2022, effectiveness is considered as "doing the right thing" and is a

critical component of business success.

In an article released by Creately (2021), there are two ways in evaluating the degree

of effectiveness of an implemented strategy. First is through examining if the strategy meets

its objectives. According to Chron, 2020, to measure the effectiveness and efficiency in an

organization strategy, the organization have to examine how it links its objectives to the
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way they plan to achieve them and the means they plan to use. A strategy is effective if it

uses the resources you allocate according to your plan and delivers the expected results.

They also added that that once your strategy is completely executed, you may assess its

overall management success by asking how well it met the objectives you established with

the resources you provided. You must evaluate where your strategic plan failed if it did not

meet its objectives or consumed more resources. If the strategy was not linked with the

company's strengths or the objectives were not reachable, the plan's performance may fall

short of expectations. In any cases, completing a strategic plan places your firm in a new

scenario, and doing a review allows you to continue with either an effective strategic plan or

one that incorporates improvements to avoid past mistakes.

The other way to evaluate the effectiveness of a business organization’s strategy is

through its customers. Kenton, 2021, defined customer as an individual or business that

purchases another company's goods or services. Customers are important because they drive

revenues; without them, businesses cannot continue to exist. They are the reason why

business organizations implement strategies. Customers’ review, ratings, and opinions about

a certain implemented strategy by an organization are simply important because they are the

one who are experiencing it. Customer feedback is essential to guide and inform business

organization’s decision making and influence innovations and changes to their product or

service. It's also essential for measuring customer satisfaction among their current customers.

(Commbox, 2019). In an article by Libretexts, 2019, they also pointed out the importance of

customers as the best marketing tool. They stated that customer testimonials, ratings, and

recommendations have always been powerful marketing tools. They often work to persuade

new customers to give something a try. In today’s digital media landscape there is

unprecedented opportunity for companies to engage customers as credible advocates. When

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organizations invest in building strong customer relationships, these activities become

particularly fruitful.

There are four criteria to measure the effectiveness of a strategy. First is awareness.

Awareness is a metric that shows the level of recognition of a brand, product, or service

among consumers. It’s important as it helps you reach a new audience, maintain the new

ones, and improve your marketing outreach. The competition is fierce, and grabbing the

attention of your potential customers is vital for your business to thrive. awareness is the level

of recognition a brand has among its target audience. Those levels answer the question – how

familiar is your target market with your brand? Awareness is one of the major assets your

brand can build. High levels of recognition can increase the value of your product or service

and give your company a competitive advantage. Second is accessibility. Is your business

accessible to everyone? Accessibility is increasingly recognized as an essential attribute of

any business. But many organizations may not yet have developed strategies for effectively

including accessibility in their operations and strategy. A successful accessibility strategy

involves making sure people in key roles understand their accessibility responsibilities and

have what they need to meet those responsibilities. Third is dependability. According to

Ramaswami, R. (2021), marketers who dependability a cornerstone of their brand strategy are

three times more likely to win customer trust because customers know that they can count on

your business. And lastly, affordability. Pricing strategy for your small business will set the

standard for your product or service in the marketplace, and is an important dimension to

both your bottom line and your competitive edge. Early in the life of your small business,

research your intended market as deeply as possible, and pay close attention to past

fluctuations in competition and demand. Customers love affordable products and services,

that’s all (Zahorsky, 2020).

On Profile
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Business Profile

Type of Ownership. One question that a would-be business entity would ask is in

what form would the business be. Should it be a corporation, partnership, or single

proprietorship? Whatever the decision would be, the type of ownership would in a way direct

the entity to a certain set of management practices and strategies. The number of people who

would be sharing in the decision-making processes consequently affects the effectiveness of

such practices and strategies. A clearer set of policies regarding general administration or

functional operating policies could be more in order if there are more owners that when there

is only one, the choice, however, depends upon a careful consideration of a number of factors

among which are the following:

1) the nature and size of the business to be started,

2) the capital required and the means of procuring it,

3) the length of time the enterprise is expected to operate,

4) the technical conditions affecting the enterprise,

5) the type of products to be manufactured,

6) the method and volume of production,

7) the kind of markets to be supplied and methods of marketing, and

8) the competitive nature of the industry.

Wood (2020) stated in his article in Nerdwallet, that sole proprietorship offers various

advantages such as simplicity in the formation and organization, full control lodged in the

owner, small initial capitalization requirement, and that profits belong entirely to the owner.

Disadvantages include limitations in terms of judgment and wisdom, and amount of capital

with corresponding unlimited liability and difficulties in management.

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Partnership, as defined in Article 1767 of the New Civil Code, is an organization of

two or more persons binding themselves to contribute money, property or industry to a

common fund with the intention of dividing the profits among themselves. Martinuzzi (2021)

enumerates some advantages of partnership that include simplicity in formation and

judgment, and greater access to credit facilities. On the other hand, some of its disadvantages

are disagreement between partners that could cause delay and difficulties prejudicial to the

enterprise.

A corporation is an artificial being created by operation of law having the right of

succession, and the powers, attributes and properties expressly authorized by law pr incidence

to its existence. Schooley (2020) said that some of the advantages of a corporation include

greater sources of capital, transferability of interest, continued existence and skilled

management. Disadvantages include mor government requirements as compared to sole

proprietorship and partnership, and less active participation in the management of the

business affairs.

According to Stowers (2022), it’s not always easy to decide which structure of a

business to choose. Business owners should consider startup’s financial needs, risk and

ability to grow. It can be challenging to switch your legal structure after registering your

business, so give it careful analysis in the early stages of forming your business. He also

added some crucial factors to consider in choosing business’ legal structure, and these are the

following: flexibility, complexity, liability, taxes, control, capital investment, licenses,

permissions and regulations.

Years in Existence. The great Benjamin Franklin once said that experience is the best

teacher. Business entities which have been in existence for a longer period of time would

have been exposed to more trying situations that have challenged the decision-making
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capabilities of the managers. They could be relying on tried and tested practices and

strategies that helped them survived through the years. The length of time would also mean

the period for recovery of capital which in turn could affect the risk-taking attitude or

diversification the entity may venture into to neutralize or anticipate possible financial

reverses. They would either become more risk-taker or risk-averse after they have

experienced business reverses or otherwise. The level of effectiveness of practices and

strategies could depend on the decision-making processes based on past experiences that have

been carefully assessed and evaluated.

Number of Workers. The size of the business in terms of workforce is one concern

that any type of business cannot ignore. No matter what type of ownership or operation

chosen might be, the size and the quality of labor force will help determine how much and to

what extent technological aspect be used as well as the wage rates and benefits to be granted

to the workers. In an article; “How to make sure you always have the right number of

employees,” by Stack (2014), she stated that keeping the proper-sized staff on hand can be

quite the balancing act. Too few team members will prevent you from properly serving your

clients. Too many employees can result in increased costs and underutilization of your

resources.

Start-up Capital. The size of business operation could be influenced by the amount of

funds available. Furthermore, the amount of funds depends on the sources available for the

entity. The more funds the entity has, the greater the chances that it would operate at its

maximum capacity to realize its desired profit. Dalby (2020) enumerated five reasons why an

entity should raise capital for its start-up. The following are the five reasons; you can scale

more quickly, you gain credibility, you can tap resources beyond just money, you receive

assistance with risk and strategic direction, ang lastly, you can enjoy generous funding terms.
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Management Profile

Age. In the study of Solomon (2016), age, among other personal variables was found

to be significantly related to the level of performance of the principals in the field. The same

with the report made by Castillo (2010), where he found out that age has significant

relationship with innovations in business fields. Additionally, Garo (2009) said that age,

among others, is negatively and significantly related to job performance.

Gender. Gender comes in as a factor depending on the nature of the activities of

business entities, the physical exertion in the production processes as well the intellectual

capacity to run the business. Fairlie & Rob (2009) found out in their study that female-owned

businesses are less successful than male-owned businesses because they have less startup

capital, less business human capital acquired through prior work experience in a similar

business, and less prior work experience in a family business. They also found some evidence

that female business owners work fewer hours and may have different preferences for the

goals of their businesses, which may have implications for business outcomes.

Civil Status. In the study of Moreno (2011), he discovered that demographic profiles

which include civil status, were not all related to the extent of efficiency of micro-

entrepreneurs.

Educational Attainment. The results of the study of Jimenez, et.al. (2015), show that

tertiary education increases formal entrepreneurship as a consequence of the higher self-

confidence, lower perceived risk and enhanced human capital. At the same time, tertiary

education also has a negative effect on informal entrepreneurship as it increases awareness of

and sensitivity to the possible negative repercussions of this kind of activities. In addition, the

impact of secondary education on formal entrepreneurship is positive as well, although in this

case, the effect on informal entrepreneurship is not significant. Even though secondary
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education also increases awareness of the potential negative repercussions of informal

entrepreneurship, this effect is counteracted by a lack of management skills.

Years in Business. In the of Garo (2009), he discovered that among others, length of

relevant service of business managers are negatively and significantly related with job

performance.

Administrative Experience. In many organizations, the length of employees'

experience is a key factor affecting decisions about the management of human resources,

including selection, retention, and promotion decisions (Mills, 2015). During periods of

consolidation, for instance, employees with more tenure are frequently retained and those

with less are laid off. Underlying many personnel decisions is the assumption that individuals

who have been in one or more positions with a company longer than other employees are

more productive. They have a record of past success and cumulative business savvy that

makes them tangibly more valuable to a company.

Trainings Attended. Lagasca (2010) found out in his study that there is a significant

relationship between trainings and workshops attended to the indications of implementation

of management practices and strategies.

All researches and articles show correlation with the present study of the researchers

about the customer retention strategies and its effectiveness. The previous studies will guide

the researchers in conducting the study.

Conceptual Framework

The business as an artificial being can only operate through natural persons in whose

hands the fate of the business depends. A person’s knowledge, skills, and values can spell the
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way he makes use of his available inputs considering the nature, the size, and the status of the

business. His choices of actions and decisions affect the level of attainment of given goals

and objectives.

The conduct of this study will be guided by the paradigm as illustrated in Figure 1.

INPUT OUTPUT IMPACT

PROFILE OF THE DEGREE OF

MILKTEA SHOPS EFFECTIVENESS OF
CUSTOMER
Business Profile RETENTION
Ownership STRATEGIES
Years in Existence
Number of Workers
Start-up Capital CUSTOMER Awareness
Average Annual Sales RETENTION
STRATEGIES Accessibility
Management Profile
Age Dependability
Gender
Civil Status Affordability
Education Attainment
Years in Existence
Administrative
Experience
Trainings Attended

Figure 1. The Research Paradigm

The paradigm in Figure 1 explains the conceptual framework of the study. The profile

of the respondents which consists of the business and management profile are hypothesized

to influence the nature and extent of the customer retention strategies that prevail in the day
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to day operation of the entity. The customer retention strategies will be assessed and

evaluated through the respective indicators; awareness, accessibility, dependability, and

affordability. These strategies will be assessed and evaluated by the customers to determine

their degree of effectiveness.

Operational Definition of Terms

The following terms were defined based on their usage in the research accordingly.

These terms will help the readers for a better understanding about the research.

Milk Tea Wars. A term coined by millennials to describe the competitive scene of

milk teashops industry in the country. In this study, the term is used to express that milk

teashops in Vigan City has their own unique strategies that gives them the edge to other milk

teashops.

Effectiveness. This refers to the degree to which something is successful in producing

a desired result.

Customer Retention. This refers to the relationship between customers and business.

This is for a business to retain customers that helps to yield economic benefits.

Milk Teashops. This refers to business entities that sell milk tea, fresh tea, iced tea,

coffee, fresh milk, smoothies, frappe, and other cold and hot beverages.

Customer Retention Strategies. These are the marketing plans manifested by an

organization that could help in maintaining customers of your business.

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Awareness. This measures the strategies if the customers have knowledge or

have an idea about the business because of it.

Accessibility. This measures the strategies if it can bring the products to the

most convenient place and time for the customers.

Dependability. This measures the strategies if it can anticipate the needs and

wants of the customers at the right time and place with the right quantity.

Affordability. This measures the strategies if it can provide relatively

reasonable prices to the customers.

Ownership. This refers to the number of individuals or establishments owning the

entity such as sole proprietorship, partnership, and corporation.

Sole Proprietorship. This is ownership of an entity by one person.

Partnership. This is ownership of an entity by at least two persons and is

governed by laws on partnership.

Corporation. This is ownership by at least five persons and is governed by

laws on corporation.

Years in Existence. This pertains to the number of years the entity has been in

operation.

Number of Workers. This refers to the number of all paid employees directly or

indirectly involved in the production of the beverages.

Start-up Capital. This refers to the initial investment of the owners whether in cash

or in kind, such as equipment or merchandise.

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Average Annual Sales. This pertains to the amount of goods sold during a give year

whether or not they were sold on cash basis or on credit.

Age. The length of time the manager has lived or existed.

Gender. This is the range of characteristics pertaining to femininity and masculinity

and differentiating between them.

Civil Status. This is the distinct options that describes the manager’s relationship

with a significant other. Whether he/she is single, married, divorced, or widowed.

Educational Attainment. This refers to the highest level of education the manager

has completed.

Years in Business. This refers to how long the manager has been in the milk teashop

business.

Administrative Experience. This tells if the manager has previous job position that

involves significant secretarial or clerical responsibilities.

Trainings Attended. This refers to trainings and seminars that the manger took part

in that is connected to his/her managerial position.

Assumptions

This study will be guided by the following assumptions:

1. The respondents will fully understand the questions they will be asked and

will answer these questions honestly and with integrity.

2. The research instrument will be valid and will elicit reliable responses.
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3. The researchers will properly utilize all the statistical tools to come up with a

definitive result.

Hypothesis

This study postulates the following hypothesis:

1. There is a significant relationship between the business and management

profile and the degree of effectiveness of the customer retention strategies of the milk

teashops in Vigan City.

Research Methodology

The discussion of the research design, population of the study, data gathering

instrument, data gathering procedure, and statistical treatment, which will be utilized in the

study, are presented in this section.

Research Design. This study will employ the quantitative - qualitative descriptive –

correlational study. It is descriptive because it will determine the effectiveness of the

customer retention strategies by milk teashops in Vigan City. The design of descriptive

method is for the investigator to gather information about the present existing conditions to

test hypothesis or answer questions concerning the current status of the subject of the study.

Likewise, it is correlational because it will find out the nature of the variables and ascertain

the extent to which the independent and the dependent variable are related.

Population of the Study. On determining the profile of both the business and

management, the managers of the milk teashops in Vigan City will be the respondents. They

will also be the one to be interviewed on determining the implemented customer retention

strategies of milk teashops in the city. Meanwhile, fifty (50) customers who at least visited
 23

five of the existing milk teashops in Vigan City will be the ones to evaluate the degree of

effectiveness of these implemented strategies. The population are picked through the non-

probability purposive sampling technique in which the respondents will be chosen for a

specific purpose. Since the managers know all the needed information about the milk teashop

they are managing, and customers are the ones who are experiencing the strategies, then they

are the appropriate respondents for this study.

Data Gathering Instrument. The primary data will be gathered by means of a

questionnaire which is based on the specific problems. These guide questions will be

subjected for validation by experts. The questionnaire will be divided into three parts: Part I

will draw out information regarding the profile of the entities and the profile of the managers;

Part II will simply determine the customer retention strategies implemented by milk teashops

in Vigan City; and Part III, which will be answered by customers, deals on the degree of

effectiveness of the customer retention strategies.

The business profile of the entities will consist of the dimension of ownership, years

in existence, number of workers, start-up capital, and average annual sales. Meanwhile, the

management profile will include age, gender, educational attainment, civil status, years in

business, administrative experience, and trainings attended. The Part II questionnaire consists

of four (4) questions in order to determine the implemented customer retention strategies of

the entities.

The effectiveness of customer retention strategies will be measured by the following

indicators which are awareness, availability, dependability, and affordability. In this,

following scale will be used: 5 – Strongly Agree (SA); 4 – Agree (A); 3 – Moderately Agree

(MA); 2 – Disagree (D); 1 – Strongly Disagree (SD).

 24

Data Gathering Procedure. The researchers will prepare all needed materials for the

gathering of the data. It includes the approval sheet that will be signed by the dean of College

of Business Administration and Accountancy (CBAA), set of questionnaires that will be

validated by experts, and letter to respondents. First, the dean of the CBAA in order for the

researchers to be permitted to conduct the study, will approve the permission letter. Second,

the researchers will determine all the milk teashops existing in Vigan City and a letter for the

appointment will be prepared. Third, the researchers will prepare a set of guide questions that

will be validated by the experts in University of Northern Philippines. Fourth, upon getting

the response of the milk teashop managers and accepting the researchers’ request, the

researchers will immediately visit and interview the manager personally. Fifth, after the

interview on the managers of milk teashops, the researchers will then proceed to interview

customers of these milk teashops. Sixth, an intensive analysis of the findings through the

statistical tools. The researchers will give meaning to the findings and discuss their relevance

to the research questions. The researchers will compare the present study’s results to the

previous related studies whether they come up with the same or different results. The data

that will be gathered will be treated using statistical tools to successfully come up with a

concrete conclusion.

Statistical Treatment of Data. The various data that will be gathered will be subjected

to appropriate statistical treatment in order to answer the questions in the study. The

statistical tools and the treatment to be used are;

Frequency distribution and percentage. This will be used to describe the profile of the

business and its management.

Mean. This will determine the extent of the customer retention strategies and the degree

of effectiveness of these strategies.

 25

Pearson Product Moment of Correlation. This will be used to determine the relationship

between the profile of the milk teashops businesses and the degree of effectiveness of the

implemented customer retention strategies.

BIBLIOGRAPHY
 26

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and informal entrepreneurship.

 27

McEnrue, M.P. (2015). Length of Experience and the Performance of Managers in the

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to-get-it/

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 28

Dalby, S. (2020). Five Reasons You Should Raise Capital for Your Startup. Retrieved from

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capital-for-your-startup/

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terms/c/customer.asp

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WP l4YAqufA

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retention /what-makes-effective-manager
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business-from-the-competition

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structure.html
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https://www.thebalancesmb.com/pricing-strategies-for-small-business-2951181

APPENDICES
 31

APPENDIX A

QUESTIONNAIRES

Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

Website: www.unp.edu.ph Mail: cbaa@unp.edu.ph Mobile#: 09178164600

MILKTEA WARS: DEGREE OF EFFECTIVENESS OF CUSTOMER RETENTION

STRATEGIES OF MILKTEA SHOPS IN VIGAN CITY

Part I

Name of Business: (optional)

 32

Address:

Direction: Please check the response that applies to your business.

A. BUSINESS PROFILE

1. Ownership 3. Number of Workers

Sole Proprietorship
_ 1–4
Partnership
_ 5–8
Corporation
_ More than 9

2. Years of Existence 4. Start-up Capital

Less than a year Below P100,000

1 – 5 years P100,001 – P250,000
More than 5 years More than P250,000

5. Average Annual Sales

Below P150,000
P150,001 – P250,000
More than P250,000

B. MANAGEMENT PROFILE

Name: __ (optional)____________________

1. Age 2. Gender
Below 25 years old Male
__26 – 35 years old Female
36 years old and above Others (please specify)
 33

3. Civil Status Others (please

specify)
Single
Married
5. Years in Business
Widow/Widower
Below 1 year
Separated
1 – 5 years
More than 5 years

6. Administrative Experience
Manager
Supervisor
Department Head
4. Educational Attainment
Others (please
Elementary
specify)
Graduate
High School
Graduate
College Graduate

7. Trainings Attended
________7-9
________ 1-3
________4-6 ________More than 9
 34

Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

Website: www.unp.edu.ph Mail: cbaa@unp.edu.ph Mobile#: 09178164600

MILKTEA WARS: DEGREE OF EFFECTIVENESS OF CUSTOMER RETENTION

STRATEGIES OF MILKTEA SHOPS IN VIGAN CITY

Part II

Name (optional): ________________________________

 35

1. What are the implemented customer retention strategies that help in

spreading awareness to the customers about your business?

2. What are the implemented customer retention strategies that make the

products more accessible to customers?

3. What are the implemented customer retention strategies that make the

business dependable for customers?

4. What are the implemented customer retention strategies that make the

products affordable for customers?

 36

Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

Website: www.unp.edu.ph Mail: cbaa@unp.edu.ph Mobile#: 09178164600

MILKTEA WARS: DEGREE OF EFFECTIVENESS OF CUSTOMER RETENTION

STRATEGIES OF MILKTEA SHOPS IN VIGAN CITY

Part III

Name: (optional) __________________________

Give at least five (5) milk teashops you have visited in Vigan City:
 37

____________________________ ____________________________

____________________________ ____________________________

____________________________ ____________________________

____________________________ ____________________________

Direction: Below are items that evaluate the effectiveness of customer retention strategies
that your favorite milk teashops implement. Please check the box which you
believe best describes the effectiveness of these strategies based on the following
criteria; awareness, accessibility, dependability, and affordability. Please be guided
with the following scales:
5 – Strongly Agree (SA)
4 – Agree (A)
3 – Moderately Agree (MA)
2 – Disagree (D)
1 – Strongly Disagree (SD)

Criteria 1: AWARENESS 5 (SA) 4 (A) 3 (MA) 2 (D) 1 (SD)

1. I have become aware of the business

because of traditional promotional
marketing activities, i.e. radio
advertisements, posters, and signages.
2. I have become aware of the business
because of its social media presence
and activities.
3. The business and its strategies leave a
good impression enough to encourage
a word-of-mouth marketing.
 38

4. I believe that the milk teashop that I

visited is definitely one of the most
well-known milk teashops in Vigan
City.

Criteria 2: ACCESSIBILITY 5 (SA) 4 (A) 3 (MA) 2 (D) 1 (SD)

1. I feel reassured because the milk

teashop is open at hours convenient
for all.
2. It is favorable for me because it is just
easy to go over different places in
where the milk teashop is located.
3. I can enjoy my favorite milk tea
because it is also accessible in my
house through delivery.
4. I love that I can ask their available
menu or product through online, and
other things I want to know because
the milk teashops’ social media
accounts and other contact information
are responsive to inquiries and
questions.

Criteria 3: DEPENDABILITY 5 (SA) 4 (A) 3 (MA) 2 (D) 1 (SD)

1. I feel that my voice is important as a

customer because the milk teashop
conducts customer surveys to
anticipate our needs and wants, and
also our comment and suggestion.
2. I keep coming back to this mil teashop
because the staff are approachable.
They know how to get along with
customers and handle our needs and
concerns.
3. The milk teashop keeps me updated of
what is happening because they
consistently announce timely and
important information about their
business, i.e. when the shop is closed
in a certain day.
4. I can enjoy myself in the milk teashop
because, aside from their soft
beverages, the shop also offers other
things like free Wi-Fi, good ambiance,
free charging of gadgets, and others.
 39

Criteria 4: AFFORDABILITY 5 (SA) 4 (A) 3 (MA) 2 (D) 1 (SD)

1. The prices of the products in milk

teashop are reasonable for the quantity
and quality that is why I am buying
them.
2. I like this milk teashop because it
implements discounts, promos, and
special offers in every occasion that
offers a big help in my pocket.
3. I can avail the products of the milk
teashop on a daily basis if I want to
because of its pocket-friendly prices.
4. I keep coming back to this milk
teashop because of its cheap prices.

CURRICULUM VITAE
 40

I. Personal Information
Full Name : Carl Angelo Lazo Basa
Nickname : Gelo
Address : Manzante, Magsingal, Ilocos Sur
Age : 20
Birthdate : March 19, 2002
Birthplace : Tamag, Vigan City, Ilocos Sur
Civil Status : Single
Citizenship : Filipino
Religious Affiliations : Christianity
 41

Zodiac Sign : Pisces

Height : 5’5
Weight : 70 kgs
Email Address : carlangelobasa1234@gmail.com
Name of Father : Ferdinand Basa
Name of Mother (Maiden) : Remy Gina Lazo
Motto : “There’s always hope.”
II. Educational Attainment
Elementary Manzante Elementary School
Manzante, Magsingal
2014

Secondary
Junior High School The Magsingal Institute of
Secondary Education,Inc.
San Lucas, Magsingal
2018
Senior High School Accountancy Business Management
(ABM)
University of Northern Philippines
Tamag, Vigan City
2020

Tertiary Bachelor of Science in Business

Administration (BSBA)
University of Northern Philippines
Tamag, Vigan City
2020 - present

III. Attended Seminars / Trainings

School Leadership Training: Transparency.
Mainstream. Integrity
 42

The Magsingal Institute of Secondary

Education, Inc., San Lucas, Magsingal,
Ilocos Sur
2017

I. Personal Information
Full Name : Gerlly Mae C. Bellon
Nickname : Maymay
Address : 11 Mangga St. North Signal Village
Age : 19
Birthdate : October 25, 2002
Birthplace : San Fernando City, La Union
Civil Status : Single
Citizenship : Filipino
 43

Religious Affiliations : Christianity

Zodiac Sign : Scorpio
Height : 5’2
Weight : 40 kgs
Email Address : cruzgerllymae@gmail.com
Name of Father : Billy C. Bellon
Name of Mother (Maiden) : Geraldine F. Cruz
Motto : “Education is the key to success”
II. Educational Attainment
Elementary Cabugao North Central School
Rizal, Cabugao
2014

Secondary
Junior High School Ilocos Sur National High School
Gomez St., Brgy. VII, Vigan City
2018
Senior High School Accountancy Business Management
(ABM)
Ilocos Sur National High School
Tamag, Vigan City
2020

Tertiary Bachelor of Science in Business

Administration (BSBA)
University of Northern Philippines
Tamag, Vigan City
2020 - present

III. Attended Seminars / Trainings

Job Orientation on Disposition of Records
 44

2022

I. Personal Information
Full Name : Dhonna Mae Javar Bustillos
Nickname : Mayo
Address : Bayugao Oeste, Sta. Cruz Ilocos Sur
Age : 19
Birthdate : August 10, 2002
Birthplace : Pok Fu Lam, Hongkong
Civil Status : Single
Citizenship : Filipino
Religious Affiliations : Christianity
Zodiac Sign : Leo
 45

Height : 5’1
Weight : 58 kgs
Email Address : dhonnamaebustillos@gmail.com
Name of Father : Claro M. Bustillos
Name of Mother (Maiden) : Marites Cudiamat Javar (+)
Motto : “I’ve done it before and I can do it
again.”
II. Educational Attainment
Elementary Sta. Cruz Central School
Poblacion Sur, Sta. Cruz
2014

Secondary
Junior High School Sta. Cruz Institute Inc.
Poblacion, Sta. Cruz
2018
Senior High School Accountancy Business Management
(ABM)
Sta. Cruz Institute Inc.
Poblacion, Sta. Cruz
2020

Tertiary Bachelor of Science in Business

Administration (BSBA)
University of Northern Philippines
Tamag, Vigan City
2020 - present

III. Attended Seminars / Trainings

Division Technical Education and Skills
Development Authority (TESDA –
NCII)
 46

Sidaoen, Sta. Cruz, Ilocos Sur

2017