The Effect of Change in Prices of Business Products in San Joaquin Pasig City
The Effect of Change in Prices of Business Products in San Joaquin Pasig City
Kim Obias
Rica Tibon
Cristina Tafalla
Practical Research 2
Einführung
should use a product's price to determine if the product is affordable. However, consumers
also appear to use a product's price as a measure of the product's quality. This research
might be beneficial to all businessmen also to those people who are planning to establish a
business by knowing about how the change of prices affects the product. Who will adjust?
According to many empirical studies (e.g., see reviews by Monroe 1973 and
Olson 1977) when consumers have some uncertainty concerning a product's quality, the
consumer often assumes that a higher product price indicates a higher level of quality.
a way that guarantees profitability. In setting prices, the business will take into account the
price at which it could acquire the goods, the manufacturing cost, competition, brand and
the quality of the product. If the price increases for a good or service offered by small
The organization that is involved in the business production of goods and rendering of
services after answering the question what to produce, and who to produce for, the
costumer should have a potential to pay the good that the seller produced. The difficulty
about the change in price on the products has the profitability concern to business
enterprises. A business whether small or big, simple or complex, private or public is created
to provide competitive prices but they will be affected when there is change in price
happened.
What are the possible ways to overcome this situation? Is there any possibility
that it’ll work? So, this study will focus on how small businesses react and response to the
unexpected change in price on the products they are selling and how the consumers being
affected.
The researchers conducted this study because price creates a big impact on
businesses. It is everywhere around us, mostly the owner of the business is the one who
dictate the price of their products. They have the rights to lower or higher the price
considering the factors that affecting the price, so the researchers became interested on how
change of price to the business. It will also serves as guides to the aspiring businessman that
Conceptual Framework
This figure presents the study on the effect of change in prices of business products
in San Joaquin Pasig City. Pricing a product is the reflection of what your business do.
Price communicates value and also confirms the value of your product. Thus, it is important
to be aware of the changes in price of the products being sold by the business.
paper. This filter and select the appropriate research question and methods to be use in
collecting data. For this research, the study will focus on gathering data on how businesses
relate and solve problems like price changes. The study will give emphasis on identifying
the key resources of the company that enable them to cope up with the sudden price change
in products. For this study, the research will only have respondents from owners of small
businesses.
about the various alternatives available. Pricing decision is a decision that must be taken
carefully, because of its nature and its effect on the overall goals and objectives of the
The issue of pricing decision and the cause of change in price is sensitive to the
both firms producing the homogenous consumer goods and the buyers of different
products. On the other branch of the business, it’s only the price that brings about the
revenue, such as slight change in cost, creating a lead to the price improvement on the
consumer hand, price is among the major determinant of buying a product or services. In
despite of the perceptivity of price, business organization wants to meets their pricing
decision. This evidence of some frequently organization review their prices. This has made
many firms on the consumer goods industry to close shop due to their inability to
effectively compete. The effect of price difference on the sales of consumer goods has cut
The main focus of this project is to know the effect of change in prices of business
products in San Joaquin, Pasig City. This research will use survey questionnaire to know
the effect of rapidly change in prices in every business. This is only limited to the small
business owners in San Joaquin, Pasig City. This project can be used by the people who
are planning to start up a business so that they will know the taste and preference of the
people that surrounds them or the business that they are planning. This project will let the
Entrepreneurs have been seeking to find ways on how they will face the
For the teachers, this topic will make them informative about the business and
For the entrepreneurs, this study will give them more information and widen
their knowledge about their business and it will also give them more ideas about
unexpected changes
For the future researchers, this research may help them in their study and will
serve as their guides and can use to study more about this topic.
Definition of Terms
The purpose of this is for the better understanding and to clarify the unfamiliar
Aspiring- directing one’s hopes or ambitions toward becoming a specified type of person
Foreign Literature
main purpose of the foreign literature review work was to survey previous studies. About
the effects of price changes in business products. This was in order to scope out the key
data collection requirements for the primary research to be conducted, and it formed part
of the emergent research design process. It will give us ideas and information in conducting
our study.
According to Statistics South Africa, as the price increases in urban it will also
increase in rural. But, rural prices are growing faster than urban prices. Rural populations
spend mostly of their income on foods compared to the urban populations. Food prices are
rising rapidly than the official price because it is one of the basic commodities. The lower
the income that they’ll get the lesser the food that they’ll have. And it is because of the
prices of the products. It is like a domino effect that’ll also the business owners will be
affected. If the price is too high, the demand will decrease. Prices can affect every
populations, and this is a really bad news for small businesses who are just starting up.
Higher food price means less income. They’ll tend to spend a higher proportion of their
income for food. Most of the small businesses under consideration are owned by people
who do not fall into the higher-income category. It will be a reduction of disposable income
for business owners and it means less income available for any other items. It is important
for small businesses because they finance their own savings. Reduction in disposable
income means less money is available for investing for something in a business. It prevents
a business. For most businesses, the effects on commodity prices is on their operating cash.
On how they manipulate the flow of their income. Commodity price changes is important,
since large proportion of costs will be used from buying raw materials or whatever things
are used in business. They have the control over the price and they are exposed to changes
Insight
modifications offer additional impactful cues to shoppers. But sometimes price has a
negative impact to consumers. If the price is too high, consumers will not be able to buy
that product. So, for every product, small businesses should be able to find the optimal
Local Literature
A local literature review surveys scholarly articles, books, dissertations, conference
proceedings and other resources that are relevant to our topic. This chapter presents the
related local literature or the studies done here in the Philippines that is related to our topic.
This will also present the synthesis of the art to fully understand the research to be done.
There are number of earlier literature which have analyzed the welfare impact of
price changes in the Philippines. Some researchers focused on the country-level impacts
while other looked at the household-level impacts. Furthermore, some researchers focused
on the different products of small businesses. It Is recognized that analyzing the economy-
wide impact of soaring prices is important precisely because a large increase in the prices
overall growth of a country. In looking at the impact of price increases at the country level,
FAO (2208) focused on the impact in terms of products in small businesses. According to
Asian Development Bank (2008) they also evaluated the macroeconomic impacts of high
and rising prices and its impact to the owners and consumers. Applying the Oxford
Economics, global model, the study traced the impacts or fast climbing prices on
Insight
Pricing right is the fastest and most effective way for businesses to increase profits,
boost earnings, and business that starts now will be in a good position to profit fully from
the next upturn. But pricing a new product in either direction can have unexpected effects
on the market especially to those consumers that have a lower budget or income.
Foreign Studies
Price of the product is the first thing that a buyer will check and mostly, it is their
basis of buying a thing. Pricing a product can affect the external and also the internal
environment of a business.
Professor of Marketing at the strand for business school, how well a modification works
may be affected by how much it costs. “Price can have strong behavioral effects”, said
Shiv, who co-wrote the paper with Rebecca Waber, Ziv Carmon and Dan Ariely. It has
long been known that consumers’ beliefs and expectations influence their judgement of
products and services. Shiv and his coauthors said that even there is an apparent difference
in price. When the researchers study about painkillers, they applied an electrical shock to
the study, participant wrists before and after taking a placebo that they believed was a pain
pill. We have these general beliefs about the world for example, that inexpensive products
are of lower quality and they translate into set expectations about specific products, said
Shiv. The studies have huge implications for consumers. Moreover, it was clear from the
studies that people had no idea that price was actually affect their performance.
According to studies, to compete business favorably with its peer in the same
industry, it must be able to meet the demand of the people, as well as set the right price for
the right product. Low cost and high-quality infrastructure service tends to improve price
competitiveness. In the same vein, Uzor noted that governmental policies should be
directed to overall production efficiency of the SMEs, which will in turn lower costs at the
same time increasing the power of the consumers, when the prices are reduced. According
to Monroe (2003:257) “Indeed, cost is probably the least important factor to consider when
setting product or services prices. Cardinaels et al (2004) observed that the more accurate
cost data means that participants with activity based costing would be more likely to detect
Insight
Price is always a factor to a person who is willing to buy things. They will only
check the quality of a thing after looking at the price of it. If the price suits the quality
he/she will buy it, then if not he/she will find another one that he/she think is affordable
and durable.
Local Study
Businesses spent some time to develop their small business. They need to well
manage their own business to avoid loses. By the help of everyone in and out the business
and their own innovative mind they will gain more profits than they usually do. And
Philippine small business owners keep pushing until the development leads to
achievement.
According to the study, the impact of increasing prices of different products vary
across different group of households. In fact, there are losers and gainers from the recent
increases in the prices. In response to higher prices, households adopted different coping
mechanisms, some of which are damaging and counter-productive in the medium and long
run. The Philippine Government has also responded by implementing programs that would
mitigate the negative impact of soaring prices. This would help reduce leakage of program
benefits to the non-poor as well as ensure that the poor benefit from these programs.
Insight
This studies will make small business owners more knowledgeable about pricing
their products in order for them to prevent losing disposable income but to gain more profits
Synthesis
According to the data and information the researchers collected small businesses
only finance their cash flows and expansions from their own savings then if the price
changes, all of them will be affected including them, even the consumer. Having enough
knowledge about pricing can handle the business well. To make a wise pricing in business
can catch the business customers’ interest and curiosity. When there is a change in price of
selling products in their business, there are only two possible situation that might happen.
It’s either the customers might look for another supplier or they will stay loyal to you. It
can also be beneficial to all businessmen and to those people who are planning to establish
a business by knowing about how the change of prices affects the product.
Chapter III
Research Methodology
respondents, research instrument, data gathering procedure and statistical treatments used.
Method of Research
In order to see the general picture of the impact of change in prices of business
effect relationship between two or more variables. It is a study in which the researchers
individuals. The researchers use this kind of research design because of its suitability to
Sampling Technique
of people from population in stage 1. Then in stage 2, there’s a possibility that we will use
simple random sampling to select a portion of people from each chosen batch for the final
sample.
Description of Respondents
The respondents of the study are the owner of small businesses in San Joaquin Pasig
City consisting of 20-30 members, male and female. We chose this respondents because
they are the ones who are knowledgeable person to answer our problems in the study and
Research Instrument
The methods of collecting data for a causal-comparative research study do not differ
from any other method of research. Survey questionnaire was the research instrument that
we will used in conducting our study. The questions are made to know how consumers and
owners react and response to the sudden change in price of the business products in San
Joaquin Pasig City. We used this kind of research instrument because it’s easier than the
other methods. The survey questionnaire was for the consumers and owners of small
Data-Gathering Procedure
The researchers personally given the research instruments to the respondents. They
discussed the significance of the study to the respondents and also distributed the
instruments properly.
The respondents were given allotted time to finish the forms to prevent hasty
responses. The researchers went from one section to another on collecting the
accomplished questionnaires.
After the questionnaires have been accomplished, the results were tailed and
After collecting and gathering the data needed in the research, the researcher
organized and analyze the collected data with the use of statistical tools. To completely
understand the data, the researcher will use the following statistical treatment. The
percentage and the weighted mean are the tools that the researcher use to be able to interpret
the data.
1. PERCENTAGE
This will use to determine the percentage and frequency of the respondents personal
related variables. This is usually use on profile data like age, gender, etc. The formula use
is:
%= f/n x 100
Where:
% is the percentage
F is the frequency
This will use to get average or central value. This determine the evaluation of the
respondents considering their personal profiles like level, extent, status, etc. The formula
use is:
X= Ex/N
Where:
This chapter presents and interprets the information that were collected by the
researchers from the research instrument that have used, which is the questionnaire
answered by respondents.
Age
3%
18-25
24%
26-33
34-42
50%
42 and above
23%
: Out of 30 respondents, 3% were from 18-25 years old which is equivalent to 1 respondent,
24% were from 26-33 years old which is equivalent to 8 respondents, 23% were from 34-
42 years old which is equivalent to 6 respondents, and 50% were from 42 years old and
Gender
26.66%
Female
Male
73.33%
Business
10%
Below 1 year
40%
1-2 years
3-4 years
36.66%
5 years and
above
13.33%
: Out of 30 respondents, 10% operated their business in less than a year which is equivalent
11 respondents, 13.33% operated their business in more than 3 years which is equivalent
to 4 respondents, and 40% operated their business in more than 5 years which is equivalent
to 12 respondents.
4. Can you see your small business getting bigger in the future?
3.33%
Yes
No
Maybe
83.33%
: Out of 30 respondents, 83.33% says yes that they see their business getting bigger in the
future which is equivalent to 25 respondents, 3.33% says no that they don’t see their
business getting bigger in the future which is equivalent to 1 respondents, and 13.33% says
20%
Raw Materials
30%
Consumer's
Preference
Competition
50%
: Out of 30 respondents, 20% says that the factor they consider in pricing a product is raw
materials which is equivalent to 6 respondents, 50% says that the factor they consider in
30% says that the factor they consider in pricing a product is their competitors which is
equivalent to 9 respondents.
6. What are usually the reaction of your customer when there is a sudden change in
Reaction of customer
Look for
alternative
23.33% product
Look for another
store
40%
No reactions
36.66%
: Out of 30 respondents, 40% of the customers looks for alternative product when there is
looks for another store when there is a sudden change in price which is equivalent to 11
respondents.
7. What are the advantages of having a knowledge in pricing your product/s?
Advantages
16.66% Able to attract
more customer
Return of
investment
20%
63.33%
: Out of 30 respondents, 63.33% says that the advantage of having a knowledge in pricing
a product is that they able to attract more customer which is equivalent to 19 respondents,
20% says that the advantage is that they can have a good return of investment which is
equivalent to 6 respondents, and 16.66% says that they can have a good flow of money
80%
: Out of 30 respondents, 13.33% believes that the higher the price, the higher the sales
which is equivalent to 4 respondents, 6.66% believes that the higher the price, the lower
the sales which is equivalent to 2 respondents, and 80% believes that the lower the price,
Products
3.33 Rice
Snacks
6.66%
53.33%
10%
: Out of 30 respondents, 26.66% of the product that people usually buy even in higher price
respondents, 10% are soft drinks which is equivalent to 3 respondents, 53.33% is cigarettes
respondent.
10. What likely is your first move or response when there is a sudden change in price
of your products?
20%
: Out of 30 respondents, 26.66% says that the first move they will going to do when there
is a sudden change in price is to see what their competitors will do which is equivalent to
8 respondents, 20% says that they will going to change their product which is equivalent
to 6 respondents, and 50% says that they will going to increase or decrease the supply of
their product which is equivalent to 15 respondents, and 3.33% for other reason which is
equivalent to 1 respondent.
Chapter V
This chapter summarizes the study by getting the main idea of the topic. The
conclusion given was collected from the result and observations on the outcomes of the
study which collected from the respondents in the effectiveness of changing the price of
business products. Moreover, recommendations were base from the findings and outcome
of the study.
Summary
This study was direct information from each respondents in our survey
questionnaire. The use of collected information was to know how price change of business
and used surveys to know the effect of answer to all business owners.
The study presents that most of the respondents are aware that change in price
of business products is the common reason why their sales become affected.
Findings
Our study indicated the reaction and response of the sari-sari store owners in
the sudden changes of price. As we noticed on our study most of the sari-sari store owners
are females and majority of them are 42 years old and above.
According to the research, most of them have been operating for 5 years, they
based their prices on the customers’ preferences because most of their customers tend to
buy to another store if they doesn’t like the price of their product or if it is too expensive
for them. Sari-sari store owner study in how they price the product in able for them to
attract more customers. If there is a sudden change in price, they increase or decrease their
In addition, they said that even though cigarettes have a higher price customers
Fazit
Based on the data gathered and response accumulated, the researcher has come
The respondents were equally distributed to the sari-sari store owners on San
Joaquin Pasig City. Mostly of the respondents operated their business more than five years.
Almost of them see that their business will getting bigger in the future. Primarily, small
owners consider consumer’s preference as the factor in pricing a product. Usually, the
reaction of the customer when there is a sudden change in price of their product is to look
for another store that suit to their budget. Small business owners have an advantages of
having a knowledge in pricing their products in a way that they can be able to attract more
customer. They also say that the price influence their sales because the higher the price, the
higher the sales they can have. Usually the kind of product that consumer buy even in it
has a higher price is the rice. Almost all of the small businesses first move or response
when there is a change in the price is to see what their competitors will do. All small
Recommendations
As a researchers in this study, we recommends the following for the people who
Entrepreneurs- The researcher recommend that businessmen should know the right way
of pricing their products. Having a great knowledge about pricing can help attract more
customers. Since the very first factor that customers consider in buying is the price of the
product, it can help your business increase sales and be more profitable.
Future researchers- The future research must continue and widen this study that the
current researcher have stated. They can find out more advantages and disadvantages of
pricing products. They can discover and answers question related to pricing business
products. They can improve their study by looking at other point of feedback system