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COMPARATIVE STUDY BETWEEN 7-ELEVEN AND

MINISTOP AS PERCIEVED BY GRADE 12 ABM


STUDENTS SY: 2019-2020

CHAPTER 1
INTRODUCTION AND ITS BACKGROUND

1.0 Introduction
A convenience store is a small retail business which stocks everyday items which the
average person uses. It may range from snack foods to toiletries to tobacco products. In the
United States, convenience stores are often associated with fuel stations. They are often located
along busy roads or at important intersections in a community. Convenience stores also go by a
number of different names. They may be referred to as corner shops, party stores, corner stores,
or c-stores. People sometimes underestimate how important convenience and corner stores are to
a community. They are operated by local people and employ local people. They are very
important to the community.

Convenient stores have tended very popular crime target, notably shoplifting and robbery.
Convenient store have their plans on establishing special task forces through the help of the
authorities. In America, every convenience stores are often been targeted through armed robbery.
Some areas of the United States, it is unusual for store clerks to be working with armed
bulletproof glass and windows, or even during daylight hours. Some convenient stores may even
limit their access inside at night or at wee hours, which requires every customer to approach
through a walk-up window for this situation in making purchases. The main dangers are that
almost all convenience stores may have only one person working in night shift mode. Most of
the transactions are in cash value and easy resold merchandise like liquor, lottery tickets, and
cigarettes on the site.

Two popular convenience store here in the Philippines, the first one is the 7-Eleven. It is a
Japanese-owned American International chain of convenience stores. Their headquarters is to be
found at Dallas, Texas. In the year of 1946 the chains name was changed from "Tote'm" to "7-
Eleven" which reflects their company's new extended hours. Even though it's typical outlet is
small in size and carries a limited stock of food, drinks, and other high turnover products but
stays open for long hours. The other one is the Ministop, a chain of 24-hour convenience stores
that operate as a grocery and fast food diner combined. It has a core business policy which is
quality, services, cleanliness and assortment/availability. Minister is not just for emergency
grocery purchases by people who need to leave after a minute. The benefits of convenience store
are they are a natural destination point for the neighborhood in which they are located. If
someone requires a couple of items that doesn’t justify a trip to the local grocery store, then a trip
to the convenience store down the street makes more sense. Although the prices at a convenience
store tend to be a little higher, customers spend less to get there, which creates a pricing balance.
People stop by these stores because they are convenient, having what they need to get through
their day. Convenience stores usually charge significantly higher prices than conventional
grocery stores or supermarkets. A convenience stores order smaller quantities of inventory at
higher per-unit prices from wholesalers but their products are just the same products in other
stores. The main concern of this study is which convenience store is better even the prices are
more expensive and even they have a wider choice of stores where they can choose to shop
which follows the suggested retail price (SRP) on every product.

A. HISTORICAL BACKGROUND

1.1 Statement of the problem

To know the level of satisfaction of the preferred convenience store: 7-Eleven and Maintop as
perceived by OLFU-Valenzuela campus ABM, SY 2019-2020
1. To know the demographic profile of the respondents in terms of:

1.1 Gender

1.2 Location

1.2 Daily allowance

2. How often they buy the fine dining foods or products and dine in?

a. Once a week

b. Twice a week

c. Everyday

d. Once a month

3. How do respondents perceived the marketability of 7-Eleven and Minister in terms of:

3.1 Quality of the products


3.2 Price of the product

3.3 Service rendered by the crews to the customers

3.4 Accessibilities

3.5 Safety; and

3.6 Convenience

4. What is the level of satisfaction of the respondents?

4.1 High satisfied

4.2 Very satisfied

4.3 Satisfied

4.4 Very dissatisfied

4.5 Dissatisfied

5. What are the marketing strategies used by these convenience stores?

1.2 Hypothesis
The following assumptions were posed for this study:

1. There are reasons why people prefer to buy in convenience store.

2. There are different marketing strategies employed by the convenience store.

3. The customers have different perception on the different aspect of marketability, food quality
and service rendered of a convenience store.
1.3 Research paradigm

INPUT PROCESS OUTPUT

1. To know the demographic


profile of the respondent
1.1 Gender
1.2 Location
1.3 Daily allowance Identified customer
satisfaction;
2. How often they buy at
convenience store Highly satisfied
2.1 Once a week Very satisfied
2.2 Twice a week Satisfied
2.3 Everyday Very dissatisfied
Conducting a survey by Dissatisfied
2.4 Once a month means of questionnaire
3. To know the reason why
customers prefer to buy in
convenience store
3.1 Quality of the
products Determined convenience stores
3.2 Price of the product Data analysis- is the process
strategies
3.3 Service rendered by of bringing order, structure
the crews to the customers and meaning to the mass of
3.4 Accessibilities collected data. It is a messy,
3.5 Safety; and ambiguous, time consuming,
3.6 Convenience creative, and fascinating
process.
4. To know the Level of
satisfaction of the
respondent
4.1 High satisfied
4.2 Very satisfied
4.3 Satisfied
4.4 Very dissatisfied
4.5 Dissatisfied

5. To determine the
marketing strategies used by
these convenience store
1.4 Conceptual framework

1.5 Significance of the study


This study is identified to be beneficial to the following:

To the first time business owners. This study can help them to gain more knowledge in dealing
with different consequences as they manage their business.

To the customers/respondents. This study can help those who are also curious about the
marketability and the marketing strategy on how the owners handle their business.

To the marketing students. This study can help as a reference and they can get information
from the result of this research. They also get some ideas which are relevant to their topic or
study.

To the future researchers. They can use this as their reference in creating their own research.
This may contain some ideas which are relevant to their study.

1.6 Scope and limitation of the study


This research was conducted to be able to know the marketability, food quality and
service rendered of convenience store in areas in Valenzuela City. The researchers conducted this
study in two selected convenience stores in Valenzuela City which is the 7-Eleven and the
Ministop which operates 24 hours and 7 days a week. Those branches that are not operating 24
hours and 7 days a week are not included as respondent in the study.

1.7 Definition of terms


The following terms were defined within the context of the study:

1. Accessibility

Extent to which a consumer or user can obtain a good or service at the time it is needed.

2. Convenience Store

Sells convenience goods, and opens usually from early hours to late at night.

3. Market
An actual or nominal place where forces of demand and supply operate, and where
buyers and sellers interact.

4. Marketability

The ability of a commodity to be sold or marketed.

5. Marketing strategy

An organization strategy that combines all of its marketing goals into one comprehensive
plan.
CHAPTER 2
REVIEW OF RELATED LITERATURE

2.1 Foreign Literature


In United States, the convenience store industry continued to show its resilience in 2014,
growing steadily in number of retail outlets during in economy still trying to find its feet.
According to 2015 and NACS/Nielsen convenience industry store count increased from the year
prior’s count of 151,282 stores as of December 31, 2013. The annual survey shows that the
convenience retailing industry roughly doubled in size over the three decades. At year-end 1984,
the store count was 85,300 stores, at the year-end 1994 the store count was 98,200 stores and at
year end 2004 the store count was 138,205 stores.

According to Nielsen, convenience store account for 33.9% of all retail outlets in the United
States, which is significantly higher than the U.S total of other retail channels including
drugstores (41,799 stores), supermarket/supercenter ( 41,529 stores) and dollar stores (26, 572
stores).

NACS Chairman Steve Loehr, Vice- President of operation support at La Crosse, Wis - based
kwik - trip said that their continued growth even during sluggish economy, shows that our core
offer of convenience resonates more than ever with our customers, whether they visit as for a
fuel fill- up, quick snack or drink, or stop by four fill in groceries or healthy take-out meals.

Among the States, Texas continues to leadin store count with 15,434 stores. The rest of the top
10 states for convenience stores are California ( 11,403), Florida (9,810), New York (8, 247) ,
Georgia (6,766), Nork Carolina (6.301), Ohio (5,539), Michigan, (4,907), Illinois (4,670), and
Pennsylvania ( 4,604) which nudged virginia out of the top 10 in 2014.

In Costa Rica, Family owned operated convenience stores called pulperias have been common
since 1990s and there are many of those stores in every neighborhood. In the 2010s modern
convenience stores were introduced, mainly by the AMPM company, Competitors launched
brands such as Musmanni Minisuper (a chain of bakery stores promoted to convenience stores),
Vindi (operated by Automercado Supermarket company) and Fresh market (operated by AMPM
in format appealing to prosperous neighborhoods).

While in Indonesia, Convenience stores may on; be built usually 500 meters from nearest
traditional market. In small city or rural areas, this means a smaller area are often built side by
side or at maximum within 50 meters of each other.

Local convenience store brands are Indomaret and Alfamart. Both targeting all public, where
imported brands like 7-Eleven, Circle K or Lawson are targeting big cities and cater to a lifestyle
more than “convenience”. To be classified as a convenience store,the store should occupy no
more than 100 meters square of service area, on in some local residence, up to 250 m.

Indonesian government restrict convenience store license, so it can only be bought by franchisee,
using different name and different brand, or classifying it as cafeteria. A convenience store with a
cafeteria license is only allowed to sell maximum 10 percent of its service space for non-food/
beverages product.

In Japan, the convenience-store chains have gradually increased their presence in the retail sector
they need to evolve even further during the third phase. Demographic and social changes in
japan, including an aging population increase in the number of women entering the work force,
present convenience stores with new opportunities. Women and elderly people, who have
infrequently patronized convenience stores to date, are now potential new categories of clientele
as they discover the convenience of being able to do all their shopping and run all their errands
within walking distance of their homes.

As the total number of convenience stores in japan tops 55,000 locations, the three major
convenience-store chains have been steadily increasing their network through aggressive store
openings, the leveraging of their store networks as infrastructure and their stores as bases is key
to the next phase of evolution in new business development.

In emerging countries centered on Asia, the convenience store market is in phase two of
development. In countries where consumer spending is forecast to increase accompanying
economic growth, the retail sector are also expected to develop. It is in these promising markets
where a polished business model for convenience stores originating in Japan can gain a foothold
and allow FamilyMart to grow. (FamilyMart annual report, 2015).

2.2 Local Literature


7-Eleven is the largest convenience store chain in the country. It is run by the Philippine Seven
Corporation (PSC). Its first store located in Valenzuela City opened in 1948. Its branches are now
approximately 1400. Branches of Ministop operated by the Robinsons

Convenience Stores Inc.; and Family Mart operated and franchised by the joint partnership of
Ayala Corporation and Rustans which are one of the largest shopping mall operators in the
Philippines.

“We anticipate this trend in the convenience store segment to persist in the advent of past-paced
and more demanding lifestyles of consumers” said Lourder Deocareza, the new business
development head for Kantar World panel.

Based on Nielsen’s shopper trends report, as cities and urban centers in the Philippine countries
to expand in the next 10 year, convenience - driven lifestyle will wield a strong influence on
Filipinos shopping habits and way of life.

“This is becoming a precious commodity and to cope, consumers are looking and willing to
spend for products and service which provide convenience” Navalta said a Nielsen’s shopper
insights leader in the Philippines.

Among retail channels, convenience stores saw the most rapid expansion at 8%, with a store
count of 2,900 compared to about 1,000 stores in 2011, Nielsen reported.

There a growing number of convenience stores, following their rising popularity among
consumers. Key players like 7-Eleven and Ministop which have one to two check-out counters
and are operational 24 hours a day have stimulated this solid growth as they have started to
expand their footprint into the provinces .An Maybank ATR Kim Eng titled Asean corporate
insight reported that Philippine Seven Corporation of 7-Eleven, would continue to be the leader
in the industry 1282 outlets that delivered P17.1 million revenues and P20.6 billion sales last
year (2015).

According to the Press release of the county’s largest convenience store operator, Philippine
Seven Corporation grew its net profit last year by 27.9 percent to P873.3 million on the back of
improved operating margin and continued store expansion. For year 2015, PSC - The local
license of 7-Eleven Convenience Stores in the Philippines will increase its capital expenditure
budget by more than 50 percent to 3 billion to support its accelerated store expansion strategy.

The improved financial performance was attributed to the increase in sales of all corporate and
franchise- operated store, which posted growth of 19.3 percent to P20.6 billion at end 2014
compare to the previous year. Overall, PSC opened 286 new stores and closed down 13 stores
last year. Ministop which operates 24 hours and seven days a week, was brought to the
Philippines by Robinsons Retail Holdings,Inc. in partnership with Ministop Japan and Mitsubishi
Corporation. Its goal was to answer the needs of Filipinos for quality products they can get on
the go.

Fourteen years later, Ministop has served millions of Filipinos as it continues to expand its
network of stores all over the metro, having recently celebrated the opening of its 400th store at
the Trion Towers in Bonifacio Global City. 24 hour chain is committed to ensuring fast and
efficient service at all times in efforts to provide affordable food and Beverage choices to its
customer.

2.3 Local Literature


A study conducted by Kantar World panel leader in consumer knowledge and insights
based on consumer panels shows a 45% increase in convenience store purchase from January
2014 to January 2015. Kantar world panel traced the shopping behavior of 3,000 Filipinos homes
in urban and rural areas across the country. Findings show that from 16.1% in 2014, 18.5%
homes are now buying in convenience stores with one to two check-out counters and are optional
24 hours a day like 7- Eleven and Ministop.

Convenience store channel is the fastest growing retail channel in the Philippines at 45%
followed by direct sales at 31% and drug stores at 11%.

A majority of convenience store buyers are from the National Capital Region, South Luzon, and
Mindanao, from classes ABC and Urban households that are typically comprised older homes
with residents aged 13 and above. (Rappler.com, 2015)

“The convenience store sector will mirror the consumer landscape in the next few years as the
country enjoys more economic development” said Tara Prabhakar a TNS Asia Pacific Managing
Director of Retail and Shopper.

“The consumer landscape is changing. About 70 percent of the Philippines will be urbanized by
next year. The cost of doing business has actually gone up so it makes more economical sense to
look smaller (store) format,” Prabhakar shared, adding that as more people go to the cities to
work and live, there will be a bigger market for convenience stores. (Manila Bulletin, 2014)

The market share of convenience store was rise to 0.3% from 0.2% in 2014. Registering the
highest compared traditional (+2%) growth and modern trade channel (-2%) while Filipinos
spend most for food purchases, the personal care category experienced the fastest growth at
2.5%. The study further shows that top 4 food purchases remain the same with ice cream, total
milk, snacks and alcoholic beverages.

According to Sakolnakorn, T., 2013 Violence in the lower south of Thailand has happened for
more than 8 years, and it has affected the lives of local people; there is economic decline and
many businesses are falling. The objective of this study is to analyze the management problems
of convenience stores in lower-south Thailand and to study the management strategies of
convenience stores for survival in this violent situation. We conducted in-depth interviews with
55 local owners of convenience stores in the towns of the Pattani, Yala, and Narathiwat
provinces. We selected the sample by convenience sampling and purposive sampling technique.

According to Keenan Jefferyartis, A college student’s budget is near-impossible to manage.


Between having to pay for food, school supplies, events, and everything in between, some
college students watch their allowance slowly trickle away as the week rolls on by. As students
become hard-pressed for cash, they search for easier ways to find their daily necessities. And
that’s where convenience stores come in. These havens for college students are affordable and
easily-accessed shops where everything students might need is sold at reasonable prices.
Everything from cheap snacks to hot meals can be found in these convenience stores. But among
the many similar stores along Taft Avenue, which is really the most convenient to go to? Taking
on this challenge, we decided to compare two of the most famous of these stores in the hopes of
deciding which convenience store reigns supreme. Is it 7-Eleven, at the foot of One Archer’s
Place? or Ministop, at the base of EGI.
According to Artis, K. and Tan, W., 2014, the writers realize that neither store is a clear cut above
the other. 7-Eleven can boast about selling fruits and hot brewed coffee, not to mention cheaper
rice meals. It seems like you must pay more, though, if you want a meal that will actually fill you
up. On the other hand, Ministop has the edge in terms of cheaper donuts and more variety with
their meals, as well as paying less for two pieces of fried chicken, a college favorite. When it
comes to the myriad of snacks and drinks being sold, the differences seem marginal. The writers
agree, though, that despite their differences, both stores fulfill their role as quick and easy stops
for students in the area. Whether it’s a midnight snack you’re looking for, or perhaps a hot meal,
or even last minute-school supplies, these convenient stores are open 24/7, ready to serve.

2.4 Foreign Study


Based on the thesis presented by Lee Wei Ting of Malaysia, as the lifestyle of the
Malaysian consumers becomes more hectic, they demanding more convenience-oriented
retailing to the benefit of convenience stores. Malaysians are increasingly switching their
spending patterns from traditional grocery stores to modern convenience stores.

Convenience stores registered strong growth, largely due to vigorous expansion of in terms of
outlet by chained and independent players, coupled with promotions by chained convenience
store operators. According to Euromonitor (2009), the sales in convenience stores grew 168
percent between 2002 and 2007, and it has predicted that it will grow another 55.2 percent in the
following five years.

According to Bianchi, (2009), convenience stores (C-stores) constitute a successful formal in


developed market such as the U.S, Canada and Japan. As an example, 7-Eleven became the
largest worldwide convenience store chain in March 2007, operating 34,000 stores in 17
countries, even larger than the world wide number of Mcdonald’s store. Only a few studies of
convenience store (c- stores) are found in the literature and they have all been held in a
developed market context (Lassk, 2000; Rapp and Islam, 2006; Sparks, 2000; Suiton anf Rafaeli
1988; Welsh et al., 2003; Worthington, 1989) These studies show that convenience store
attributes for consumers are location, product assortment, knowledge of sales associates, speed
check out, service, store layout, and parking.

Most of the studies focus on the convenience orientation of consumers ( Anderson, 1972,1971 ;
Brown,1989 ; Bucklin, 1963 ; Gross and Sheth, 1989 ; Kellie, 1958 ; Morganosky, 1986 ;
Nickols and Fox, 1983 ; Reily, 1982 ; Yale and Venkatesh 1986 ) . These studies view
convenience as anything that helps the consumer to reduce its time and effort during their
shopping process, but are mostly focus on the product market. In a retailing context, although ,
there is no one clear definition of a convenience store for the purpose of these paper we will
define it as a small, centrally located store, featuring ease of access, late - night hours, and a
limited line of merchandise and dot charges above - average process compared to a large
supermarkets that generates large volume sales. (Bianchi, 2009)
According to Wrigley, N. and Wood, S.,2018 The impact of the global economic crisis, together
with the ‘digital’ storm of unrelenting growth in online retail and its complex substitution and
modification effects, had significant implications for UK town centers and high streets.
Dramatically increased vacancy rates within town centers have focused policy debate on the
drivers of town centers’ vitality and viability in the context of profound technological and
consumer culture shifts. As consumers turned away from ‘big basket’ one-stop weekly shops at
large out-of-center stores and began shopping ‘little and often’ using a fragmented range of
alternatives, the convenience store sector, significantly altered by corporate entry, grew rapidly.
However, there is surprisingly little empirical evidence on the impacts of these new-generation
corporate convenience stores on town center and communities.

According to Ruff, R. and Akhund, A., 2016 Local food environments can influence the diet and
health of individuals through food availability, proximity to retail stores, pricing, and promotion.
This study focused on how small convenience stores, known in New York City as bodegas,
influence resident shopping behavior and the food environment. Small convenience stores in
New York City are an easily accessible source of foods and beverages. Bodegas may be suitable
for interventions designed to improve food choice and diet.

2.5 Synthesis of the study