The aim of marketing is to know and understand the customer so well that the product or service fits him

and sells itself. Peter Drucker CHAPTER I The Problem

RATIONALE Successful businesses, companies, trade outlets, and allied institutions to a large extent depend on marketing as the main system for monitoring and adapting to the increasingly changing marketplace. The marketing practice is not simply selling or advertising as perceived by some marketing educators or even sales and marketing executives, but more importantly, a whole process of matching the company to its best opportunities, in response to the need of the times. Selling, with all its complexities, is only a phase of the total marketing effort. It represents one of the so-called marketing functions, defined as those activities that help facilitate the flow of goods from the producer to the consumer. All marketing activities are aimed at fostering increased sales at some time and in some way. In fact, such activities are designed purposely to winning a large, secure share of profitable markets. Marketing is the activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large. (Lamb, Hair, McDaniel 2010) Entrepreneurship, in the simplest sense, refers to the ability of an individual to determine and come up with the proper combination of the resources available in his environment and

12

transform this into an output of either goods or services to obtain a fair profit at the price the entrepreneur sets. As of 2009 count, there are 780,437 business enterprises operating in the Philippines and employ 70% of the workforce. Of these, 99.6% (777,357) are MSMEs of which 91.4% (710,822) are micro enterprises, 8.2% (63,529) are small enterprises, and 0.4% (3,006) are medium enterprises. In region 1, there are 42,224 MSMES which generated a total employment of 131,215 - 88,242 employees for micro enterprise, 35,448 employees for small enterprises, 8,087 employees for medium enterprises. (www.dti.gov.ph/NSO Industry and Trade Statistics Department, 2009) Recognizing the potential of small and medium enterprises (SMEs), the government has declared policies to promote, support, strengthen, and encourage the growth and development of micro businesses in consonance with the trend towards economic globalization. Entrepreneurship gives social benefits especially in times of economic crisis. The SMEs serve as the foundation for employment and confidence for countries of poor economy. When jobs in the formal private sector and government are lost, the number of informal sector SMEs often increases because these enterprises have low barriers to entry and maybe the only feasible alternative for many people to earn a living. They provide an affordable supply of consumer goods. Also, SMEs are usually at lesser disadvantage than larger firms when local currencies decline in value and imports become more costly because the goods produced by the SMEs typically have less imported content than those of their competitors. While SMEs are usually more labor - intensive, they require less skilled labor. As a result, the relative competitiveness of SMEs may even improve in a weak economy.

13

The marketing practices of Home-based industries are taken into consideration in this study for the purposes of helping the entrepreneurs improve their marketing strategies; enhance the marketability of the home-based products. In this connection, quality management, production, storage, marketing and good customer services are equally important in this study. In addition, this study aims to evaluate marketing practices and business opportunities, whether these are really economic opportunities and whether these are profitable. This study also aims to help the entrepreneurs develop an effective strategy to innovate their products to penetrate greater markets. The researchers choose the home based industries because after graduation they wanted to become entrepreneurs of home-based industries and would like to penetrate the potential markets in Ilocos Norte, the Philippines and even beyond. They wanted to be the pioneer in the market with quality performance both locally and internationally. Furthermore, if given the chance to be employed in those regulatory agencies which concerns these SMEs, they already have ideas to start with for the improvement and development of these SMEs.

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THEORETICAL FRAMEWORK

The importance of entrepreneurship as the key link between knowledge and its commercial exploitations, a link upon which economic growth and wealth creation depend has been already recognized. Growth is a process while development is a product. So, development is the result of growth. These are some growth and development theories: Invisible Hand Theory. States that if each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that are beneficial to all the individual members of a community, and hence to the community as a whole. The reason for this is that self-interest drives actors to beneficial behavior. Efficient methods of production are adopted to maximize profits. Low prices are charged to maximize revenue through gain in market share by undercutting competitors. Investors invest in those industries most urgently needed to maximize returns, and withdraw capital from those less efficient in creating value. All these effects take place dynamically and automatically. (http:en//wikipedia.org//wiki//invisible hand 2010)

Non-Economic Theories. There are several other theories, which are noneconomic in nature. Their key factors are political stability, efficient public administration, open society and positive cultural values. (Fajardo, Feliciano R.,

15

1994) Porters Five Forces model of strategizing the market. A model that can be used as tool to better develop a strategic advantage over competitors within an industry. It identifies five forces that determine the long-run profitability of a market or market segment. These forces could be the basis of identifying marketing practices within and outside the organization.

Competitive rivalry. A starting point to analyzing the industry is to look at competitive rivalry. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if: There is little differentiation between the products sold between customers. Competitors are approximately the same size of each other. If the competitors all have similar strategies. It is costly to leave the industry hence they fight to just stay in (exit barriers).

Power of suppliers. Suppliers are also essential for the success of an organization. Raw materials are needed to complete the finish product of the organization. Suppliers do have power. This power comes from: If they are the only supplier or one of few suppliers who supply that particular raw material. If it costly for the organization to move from one supplier to another (known also as switching cost). If there is no other substitute for their product.

Power of buyers. Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when: There is little differentiation over

16

the

product

and

substitutes

can

be

found

easily.

Customers are sensitive to price. Switching to another product is not costly.

Threat of substitutes Are there alternative products that customers can purchase over your product that offer the same benefit for the same or less price? The threat of substitute is high when: Price of that substitute product falls.

It is easy for consumers to switch from one substitute product to another. Buyers are willing to substitute.

Threat of new entrant. The threat of a new organization entering the industry is high when it is easy for an organization to enter the industry i.e. entry barriers are low. An organization will look at how loyal customers are to existing products, how quickly they can achieve economy of scales, would they have access to suppliers, would government legislation prevent them or encourage them to enter the industry.

17

SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impacts of inputs on costs or differentiation Switching costs of firms in the industry Presence of substitute input Threat in forward integration Cost relative to total purchases in industry

THREATS OF NEW ENTRANTS Barriers to entry Absolute cost advantage Propriety learning curve Access to input Government policy Economies of scale Capital requirement Brand equity Switching costs Access to distribution Expected retaliation Propriety products

DEGREE OF RIVALRY Exit barriers Industry concentration Fixed costs/ variable added Industry growth intermittent overcapacity Switching costs Brand identity Diversity of rivals Corporate stakes

THREATS OF SUBSTITUTE Switching costs Buyer inclination to substitute Price performance Trade off substitutes

BUYER POWER Buyer bargaining Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs Industry Substitutes available Buyers incentives Figure 1. Porters Five Forces of Strategizing the Market

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CONCEPTUAL FRAMEWORK

The research paradigm shown in Figure 1 depicts the conceptual framework of the study, which shall attempt to determine how the present marketing problems and practices affects the home based industries in the locality. The profile of the entrepreneurs and marketing practices and problems of home-based industries comprise the independent variables of the study while strategies to enhance marketability of home based products constitute the dependent variable of the proposed study. Two components of the profile of home based industry owners are considered in the study personal (socio-demographic) and business profile variables. The personal profile shall include their sex, age, civil status, highest educational attainment, while their business profile shall be described in terms of the capitalization, ownership, and number of years they are in the business. The marketing practices and problems of home based industries will focus along the four Ps in marketing, the product, price, place and promotion, which will be the basis in developing or enhancing marketing strategies for the study.

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Socio-demographic profile of the Entrepreneurs - age - sex - civil status - highest educational attainment Business profile of the home-based industries - ownership - line of business - capitalization - number of years in business
Strategies to Enhance Marketability of Home - Based Products

Marketing practices adapted by the entrepreneurs - product; - price; - place; and - promotion Problems encountered by the entrepreneurs in terms of the practices adapted product; price; place; promotions;

Figure 2. Research Paradigm

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STATEMENT OF THE PROBLEM

Statement of the Problem

Generally, this study determined the marketing practices and problems of home-based industries in Ilocos Norte as basis in developing strategies to enhance marketability. Specifically, answered the following problems: 1. What is the socio-demographic profile of the entrepreneurs in terms of: 1.1 1.2 1.3 1.4 age; sex; civil status; highest educational attainment?

2. What is the business profile of the home - based industries in terms of the following: 2.1 2.2 2.3 2.4 ownership; line of business capitalization Number of years in the business?

3. What are the marketing practices followed by the entrepreneurs along: 3.1 3.2 3.3 3.4 product; price; place; and promotion?

4. What are the marketing problems encountered by the entrepreneurs along: 4.1 4.2 product; price;

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4.3 4.4

place; promotions;

5. What strategies can be proposed to enhance marketability of home-based industries? Scope and Delimitations of the Study This study was focused on the marketing practices and problems of the home-based industries in Ilocos Norte, which were the bases in developing strategies to enhance marketability and export performance. . There are forty six (46) home-based business registered with the Department of Trade and Industry - Ilocos Norte providing and supplying the needs of the people, although only twenty (20) were taken as samples for this study. This study was conducted from June 2011 to March 2012.

Importance of the Study:

The marketing practices of home-based industries are taken into consideration in this study for the purpose of helping the entrepreneurs improve their marketing strategies; enhance the marketability of the home-based products. The study will provide material evidence that benefits the following:

Home - based entrepreneurs. The study determined the present stability, marketability and profitability of home-based products. This study will therefore be beneficial to the homebased entrepreneurs in order to improve their socio-economic life and insure their economic activity.

22

Consumers. The result of the study will affirm that the home-based entrepreneurs are focusing to consumers demand.

DTI, DOST. Results of the study will be a basis of the regulatory agencies to develop more intensive researches, trainings and programs to improve the quality and packaging of homebased products so that they would be more competitive in the market. Other Regulatory Agencies. This study will also provide Local Government Units (LGUs) on basis of adapting measures to ensure the quality and safety of home-based products for the benefit of both producers and the consuming public.

The Researchers. The outcome of the study will serve as guide for them to engage in homebased businesses in the future and improve the same if they will be employed in the regulatory agencies conducting oversight supervision over the industry.

Other Researchers. This study would serve as reference material for future researchers on assessing the quality and profitability of home-based products.

Definition of Terms:

The following terms are hereby defined for the guide of the reader.

Customer

service.

This

refers

to

all

interactions

between

a customer and

a product provider at the time of sale, and thereafter. Customer service adds value to a product and builds enduring relationship.

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Home based industries. This pertains to any business activity/enterprise engaged in industry, agri-business/services, whether single proprietorship, cooperative, partnership, or corporation. Line of business. It refers to the general category applied to the home based industries for example meat processing, pottery, handicrafts, etc. Marketing. It refers to the management process through which goods and

services move from concept to the customer. As a practice, it consists in coordination of four elements called 4P's: (1) identification, selection, and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy.

Marketing Mix. This refers to the levels and interplay of the elements of a product's or service's marketing efforts, including product features, pricing, packaging, advertising, merchandising, distribution, and marketing budget; especially as these elements affect sales result. Number of years in business. It refers to the number of years the industry has been operating until the conduct of the study. Ownership. It refers to the ultimate and exclusive right conferred by a lawful claim or title, and subject to certain restrictions to enjoy, occupy, possess, rent, sell, use, give away, or even destroy an item of property. It could be single proprietorship, partnership, corporation or cooperative.

Place. It refers to the location of the market and means of distribution used in reaching it.

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Price.

It

refers

to

a value that

will purchase a definite quantity, weight,

or

other measure of a good or service.

Product. It refers to a good or service that most closely meets the requirements of a particular market or segment and yield enough profit to justify its continued existence.

Production process. It refers to the manual, mechanical or chemical steps used to create an object, usually repeated to create multiple units of the same item. Generally involves the use of raw materials, machinery and manpower to create a product. Profile. The term implies personal and business profile of the home based entrepreneurs who serve as respondents of the study. Their personal profile is described in terms of their age, sex, civil status, and highest educational attainment. Business profile covers the number of years in operation, line of business and number of workers.

Promotion.

It refers to the advancement of a product, idea, or point of

view through publicity and/or advertising.

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CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES This chapter presents reviewed materials which have both direct and indirect hearing of the study. SMALL BUSINESS DEFINED A small business is one in which is independently owned and operated and which is not dominant in its field of operation. The term independently owned means ownership is by a private individual, a partnership, or a corporation. The term not dominant indicates that a small business does not control a sizeable share of its market (Medina, 2003). Magna Carta of Micro, Small and Medium Enterprises (RA 6977 amended by RA 9501 of 2008) defines Micro, small, and medium enterprises (MSMEs) as any business activity/enterprise engaged in industry, agri-business/services, whether single proprietorship, cooperative, partnership, or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, must have value falling under the following categories: By Asset Size* Micro: Small: Medium: Large: Up to P3,000,000 P3,000,001 - P15,000,000 P15,000,001 - P100,000,000 above P100,000,000

Alternatively, MSMEs may also be categorized based on the number of employees:

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Micro: Small: Medium: Large:

1 - 9 employees 10 -- 99 employees 100 -- 199 employees More than 200 employees

(*As defined under Small and Medium Enterprise Development (SMED) Council Resolution No. 01 Series of 2003 dated 16 January 2003) The Declaration of Policy, RA 9501, Sec. 2 promotes, supports, strengthens and encourages the growth and development of MSMEs in all productive sectors of the economy, particularly rural/agri-based enterprises. The State shall recognize the specific needs of the MSMEs & shall undertake to promote entrepreneurship, support entrepreneurs, encourage the establishment of MSMEs, & ensure their continuing viability & growth and thereby attain countryside industrialization. The Magna Carta stipulates a mandatory lending quota for financial institutions at 6% of loanable funds to small enterprises, and 2% to medium enterprises, up to 2007.Four guiding principles were set as key policies for SME development: A minimum set of rules and simplification of procedures and requirements; encouragement of private sector participation; coordination of government efforts for coherence of objectives; and decentralization.

Barangay Micro Business Enterprises (RA No. 9178 of 2002) The Barangay Micro Business Enterprises Act of 2002 was enacted to support eligible microenterprises as well as the informal sector through incentives to local government registered barangay micro-enterprises (BMBE), exemption from income tax, reduction in local taxes,

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exemption from payment of minimum wages, financial support from government financial institutions, and technology assistance from government agencies.

Contributions of Entrepreneurship to the Economy Entrepreneurship employs the various resources present in the economy. Many of these resources tried to be utilized and maximized. Entrepreneurs, therefore, make productive use of otherwise non-productive resources. Entrepreneurs need manpower for their business operation. They provide employment opportunities to various individuals. Professional growth and skills enhancement are also important contributions of entrepreneurs. It is said that entrepreneurship is the backbone of the Philippine economy. Contrary to the popular belief, it is the small and medium enterprises that make up the great bulk of the Gross Domestic Product (GDP) of a country. Economists estimate that 50-80% of the GDP of most countries actually comes from SMEs. It has been found out through international research that entrepreneurs tend to multiply during times of economic slumps and recessions. This is particularly true in Southeast Asia. If people lose employment opportunities due to economic slowdowns, business would be a logical choice for livelihood. Another contribution of entrepreneurs is their ability to innovate goods and service. The root of the word entrepreneur means to innovate, and this is precisely what entrepreneurs bring to society. They make life more comfortable and convenient for us. They make products more accessible and easier to use. Furthermore, the contribution of entrepreneurs is their ability to gain international popularity and prestige for their country. This is true especially when these entrepreneurs are already able to

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export their products or even bring their businesses abroad. The entrepreneurs country of origin becomes known while allowing the other country to earn via stronger currencies. Another important contribution of entrepreneurs is their willingness to take risks, risks that society will otherwise be hesitant to take. These people accumulate great learning experiences, which may be passed on to other business people through seminars, workshops, speaking engagements and others. Although a lot of people dont recognize it, entrepreneurs also profoundly inspire budding and potential entrepreneurs. It is said that only a master can produce a master, likewise, only business people can teach others to venture into business. Successful entrepreneurs become paragons for their entrepreneurs, potential or actual. Importance and Benefits of Small Businesses The small business sector continues to create many of the new ideas and innovations that future generations tend to take for granted. Small businesses and schools offering courses for small business development and management become the seedbed of tomorrows products and daily convenience. It said that all big enterprises come from small beginnings. Small businesses contribute to the gross national product (GDP) of a country and meet local needs that many of the national producers do not offer. Local producers and suppliers of services from a great part in the day-to-day activities of every community-be it a small town or a large municipality. Furthermore, it is the vibrancy of the local economy that continues to draw investors into an area, and encourage local people to stay and contribute to the communitys productivity. When the local economy is not vibrant, people tend to emigrate into cities and metropolitan areas, or

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worse, to other countries. Having a strong local economy allows a more distributed growth and development in a country. Needless to say, the presence of micro-enterprises and small businesses contribute to the revenues of local communities. The more enterprises the more transactions and government revenues are generated. With regard to the benefits of being small, small businesses survive and prosper for many different reasons: small businesses develop more personal relationships, relatively low overhead costs, catering to limited or niche market and quicker responds to trends and situations. Challenges for Small Businesses Being small does have some disadvantages. Running an enterprise on your own involves hard work and having to make most decision on your own. Usually, the time involved in running an enterprise exceeds the time needed in working for an employer. In fact, businesses are open during holidays. It is rather difficult to achieve economies of scale and cost - efficient when capitalization and other resources are not abundant. This could mean more manual labor exhausted in producing products rather than the use of machines and equipment. Errors in production and nomconformity to quality standards of some products are bound to occur, adding to operational costs. Another key limitation of small businesses is their inability to employ specialists or highly skilled laborers in their enterprises. Consequently, quality and productivity will be affected. The need for training these laborers and consequent costs is a prime consideration for the entrepreneurs in terms of the quality and range of products he wants to offer to his clients.

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Better technology and better information (or production processes) may not necessarily be ready available for small enterprises, unlike their bigger counterparts who can afford to buy newer equipment, and to maintain a research and development department. Access to greater financing presents yet another formidable challenge to entrepreneurs. Unlike corporations which can easily increase capitalization by increasing offered shares of stocks, many small entrepreneurs rely on their own pockets for funding, their immediate family, relatives and friends- all of this add up to a mere fraction of the capital of big businesses. Those challenges, needless to say, would imply that although entrepreneurship is worth pursuing either as a course or as a way of livelihood, it remains largely not for the fainthearted. (Azarcon, et al, 2008)

Pricing Strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. Pricing strategies for products or services include the following: Competition based pricing. Setting the price based upon prices of the

similar competitor products. Competitive pricing is based on three types of competitive product: Products have lasting distinctiveness from competitor's product. We can assume the product has low price elasticity, low cross elasticity and demand of the product will rise. Products have perishable distinctiveness from competitor's product, assuming the product features are medium distinctiveness. Products have little distinctiveness from competitor's product assuming that: product has high price elasticity, has some cross elasticity there is no expectation that demand of the product will rise. Cost plus pricing Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds on a percentage (profit) to that price to give the selling

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price. This method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price. This appears in 2 forms, Full cost pricing which takes into consideration both variable and fixed costs and adds a % markup. The other is Direct cost pricing which is variable costs plus a % markup, the latter is only used in periods of high competition as this method usually leads to a loss in the long run. Creaming or skimming. Selling a product at a high price, sacrificing high sales to gain a high profit, therefore skimming the market. Usually employed to reimburse the cost of investment of the original research into the product: commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price. This strategy is often used to target "early adopters" of a product or service. These early adopters are relatively less price-sensitive because either their need for the product is more than others or they understand the value of the product better than others. In market skimming goods are sold at higher prices so that fewer sales are needed to break even. This strategy is employed only for a limited duration to recover most of investment made to build the product. To gain further market share, a seller must use other pricing tactics such as economy or penetration. This method can come with some setbacks as it could leave the product at a high price to competitors. Loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other profitable sales. Market-oriented pricing. Setting a price based upon analysis and research compiled from the targeted market.

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Penetration pricing. Setting the price low in order to attract customers and gain market share. The price will be raised later once this market share is gained. Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation or represent exceptional quality and distinction. Psychological pricing designed to have a positive psychological impact. For example, selling a product at $3.95 or $3.99, rather than $4.00. ( http://en.wikipedia.org/wiki/Pricing_strategies) Promotion Strategies A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional mix strategy can consist of: Advertising. Any non-personal paid form of communication using any form of mass media. Public Relations. Involves developing positive relationships with the organizations media public. The art of good public media relations is not only to obtain favorable publicity within the media, but it also involves being able to handle successfully negative attention. Sales Promotion. Commonly used to obtain an increase in sales. Could involve using money off coupons or special offers. Personal Selling. Selling a product service one to one. Direct mail. Pertains to the sending of publicity to a named person within the organization. Direct mail allows an organization to use their resources more effectively by allowing them to

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send publicity material to a named person within their target segment. By personalizing their advertising, response rate increase thus, increasing the chance of improving sales. Internet Marketing. Promotions and selling your services online. (http://www.learnmarketing.net/promotion.htm) Distribution Strategies Depending on the type of product being distributed there are three common distribution strategies available: Exclusive Distribution means severely limiting the number of intermediaries. It is used when the producer wants to maintain control over the service level and outputs offered by the resellers. Often it involved exclusive dealing arrangements. By granting exclusive distribution, the producer hopes to obtain more dedicated and knowledgeable selling. It requires greater partnership between seller and reseller. Exclusive deals between suppliers and retailers are becoming a mainstay for specialists looking for an edge in a business world that is increasingly driven by price. Selective Distribution involves the use of more than a few but less than all of the intermediaries who are willing to carry a particular product. It is used by established companies and by new companies seeking distributors. The company does not have to worry about too many outlets; it can gain adequate market coverage with more control and less cost than intensive distribution. Intensive Distribution consists of the manufacturer placing the goods or services in as many outlets as possible. (Kotler and Keller, 2009).

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CHAPTER III RESEARCH METHODOLOGY

This chapter presents the research design, the source of the data, locale of the study, population and sampling, instrumentation and data collection procedure and tools for data analysis. RESEARCH DESIGN This study employed the descriptive research design. Salmorin (2006) state that a descriptive study is concerned with conditions or relationships that exist, opinions that are held, processes that are going on, effects that are evident, or trends that are developing. It is primarily concerned with the present, although it often considers past events and influences as they relate to current conditions. This study identified and described the personal profile of the home-based business owners and their business profile, the marketing practices and problems by the home - based industries.

SOURCE OF DATA

Locale of the Study. The study was conducted in the province of Ilocos Norte, particularly in Laoag City , Sarrat, Banna, Batac, Paoay and Currimao where the sample homebased businesses are located.

The City of Laoag is a 1st class component city in the province of Ilocos Norte, Philippines. It is the capital of Ilocos Norte, and the province's political, commercial, and industrial hub. It is the location of the Ilocos region's only international airport. The

35

municipalities of San Nicolas, Paoay, Sarrat, Vintar, and Bacarra form its boundaries. The foothills of the Cordillera Central mountain range to the east, and the South China Sea to the west are its physical boundaries. At present, most industries in the city are small-scale consisting of small-scale food processing factories, rice mills, jewelry-making, hollow blocks factories and metal crafts.

San Nicolas is a 2nd class municipality in the province of Ilocos Norte, Philippines. San Nicoleos are famous for their traditionally designed pots (called "bangas") and their warm hospitality towards visitors.

Sarrat is a fourth class municipality in the province of Ilocos Norte, Philippines. It is situated geographically east of Laoag City for an approximately 7km road distance. Other municipalities that form part of its boundaries are: Vintar, Piddig, Solsona and San Nicolas. The town is crossed and cut into two by the Padsan River, creating north and south areas. Sarrat is famous for their hand-woven binakol cloth.

Solsona is a 4th class municipality in the province of Ilocos Norte, Philippines. The town is famous for the production of charcoal briquette. Banna is a 4th class municipality in the province of Ilocos Norte, Philippines. Rice coffee, which is made from specially chosen hybrid rice locally grown, is the towns known product. Batac is a component city in the province of Ilocos Norte, Philippines. The town is located in the northwest corner of the island of Luzon, about 11.2 km from the eastern shores of the South China Sea. The municipalities of Banna, Currimao, Paoay, Pinili and San Nicolas form its boundaries. When it comes to empanada, Batac has the best.

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Paoay is a 4th class municipality in the province of Ilocos Norte, Philippines. Handloom products such as blankets, pillow cases towels placemats, table napkins, table runners and clothing materials are the famous in the municipality. Currimao is a 5th class municipality in the province of Ilocos Norte, Philippines. Surrounded by Badoc and in the South, Pinili in the East, South China Sea in the West, and, Paoay and Batac in the North. Native delicacies are the towns pride. Population and Sampling of the Study. There are forty - six (46) home - based businesses registered with the Department of Trade and Industry. The top twenty home based industries based on capitalization among the forty- six enumerated home - based industries were taken as sample for the study.

INSTRUMENTATION AND DATA GATHERING PROCEDURE The questionnaire was the main instrument employed to obtain information from its twenty (20) respondents. The following were the major part of the questionnaire: Part I will focus on the respondents profile, which will cover the age, gender, civil status, highest educational attainment. Part II focused on the business profile, which will cover the ownership, line of business, number of years in business and number of workers. Part III focused on the marketing practices of the entrepreneur based on pricing, promotion, packaging, advertising and distribution. Part IV focused on the marketing problems encountered by the home-based industries.

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To facilitate the data gathering, letters were forwarded to the top 20 highest capitalized home-based industry owners with the approved communication from the Dean of School of Business and Accountancy. The floating of questionnaires, and distribution and collection was done by the researchers themselves. The questionnaire was administered from September to October 2011.

TOOLS FOR DATA ANALYSIS The following statistical tools will be used in analyzing the data gathered: For sub problems 1 and 2, which will focus on the personal and business profile of the home based industry owners, frequency count and percentage together with the mean will be employed. For sub problems 3 which delved on the practices adapted by the respondents, the

weighted mean was employed. Interpretation of the results was based on the following scale of mean values and descriptive interpretation:

Scale of Mean Values 4.51 5.00 3.51 4.50 2.51 3.50 1.51 2.50 1.00 1.50

Descriptive Interpretation Always practiced Often practiced Sometimes practiced Seldom practiced Never practiced

For sub - problem 4 which determined the problems encountered by the respondents, data analysis will also be done by way of weighted mean. Data interpretation was based on the following scale:

Scale of Mean Values 4.51 5.00 3.51 4.50 2.51 3.50 1.51 2.50 1.00 1.50

Descriptive Interpretation Very Serious Serious Slightly Serious Very Slightly Serious Not a Problem

CHAPTER IV PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA This chapter presents, analyzes and interprets the data gathered in view of the questions dealt with in the determination of the marketing practices and problems of home-based industries in Ilocos Norte.

Socio-Demographic Profile of the Home Based Entrepreneurs in Ilocos Norte The socio-demographic profile of the 20 entrepreneurs who comprised the respondents of the study were described along four variables their age, sex, civil status and highest

educational attainment. The results are presented in Table 1. Age. As shown by the results reflected in the table, the mean age of the entrepreneurs is 44 years. The entrepreneurs are sparingly distributed along the different age brackets with the youngest belonging to the 21 to 25 age bracket and the oldest is above 60 years of age. The findings imply that the home based industries are ventured on by adults. According to the Theory of Human Development of Erik Erikson in which he described the 8 psychosocial developmental stages, an individual who gets into the stage of adulthood, is characterized to be mature and self-

directed, has confidence in his or her abilities, able to make decisions using critical analysis and could assume social and occupational roles which are among the qualities necessary for one wanting to be an entrepreneur. Sex. Table 1 likewise reveals the distribution of the respondents according to sex. According to the results, the home based industries are dominated by female entrepreneurs (18 or 90 percent). Table 1. Socio-Demographic Profile of the Entrepreneurs n = 20 Profile Variables Age Bracket 21 25 26 30 31 35 36 40 41 45 46 50 51 55 56 60 Above 60 Mean Age Sex Male Female Civil Status Single Married Widow/er Highest Educational Attainment High School Level High School Graduate College Level College Graduate f 1 3 1 3 1 4 4 2 1 44 2 18 6 11 3 5 4 2 9 % 5.00 15.00 5.00 15.00 5.00 20.00 20.00 10.00 5.00

10.00 90.00 30.00 55.00 15.00 25.00 20.00 10.00 45.00

Civil Status. As gleaned from the findings, more than half (11 or 55 percent) of the respondents are married, six (6 or 30 percent) are single while three (3 or 15 percent) are widowers or widows. Highest Educational Attainment. Based on the results, the highest frequency (9 or 45

percent) is posted by the respondent-entrepreneurs who are college graduates. The group is followed by five (5 or 25 percent) who were able to get into the secondary level but did not graduate just like four (4 or 20 percent) of the respondent-entrepreneurs, while two (2 or 10 percent) went to college but were not able to pursue a baccalaureate degree. It is worth noting that all of the 20 entrepreneurs involved in this study have gone through formal schooling which also means that they have acquired the needed literacy skills and knowledge which is of great help to them in running a business even in their own homes. Business Profile of the Home Based Entrepreneurs in Ilocos Norte The business profile of the home based entrepreneurs was described along four variables which include ownership, line of business, capitalization and number of years in the business. Table 2 shows the results. Table 2. Business Profile of the Home Based Industries n = 20 Profile Variables Ownership Sole Proprietorship Partnership Cooperative Line of Business Food processing Handicraft Pottery Number of Workers 1 to 5 6 to 10 f 15 0 5 13 6 1 5 14 % 75.00 0.00 25.00 65.00 30.00 5.00 25.00 70.00

11 to 15 16 and above Number of Years in Operation 1 to 2 3 to 4 5 and above

0 1 2 1 17

0.00 5.00 10.00 5.00 85.00

Ownership.

According to the results, most of the home based enterprises are sole

proprietorship (15 or 75 percent), which means that for every business venture, there is only one owner. Only five (5 or 25 percent) are cooperatives, which implies that the enterprise is run by an organized group of individuals who share in running the operations and bound by their constitution and by-laws. Line of Business. As to line of business, the results reflected in Table 2 reveal that more than `half (13 or 65 percent) of the home based entrepreneurs are engaged in food processing, of which the province is noted for. In fact, the enterprise is one of the distinctive attractions of the province frequented by tourists, both foreign and local. The rest of the home based entrepreneurs are engaged in handicrafts (6 or 30 percent) and pottery (1 or 5 percent). These three ventures dominate the home based industry in the province since these are regarded as part of the Ilocano heritage, having become likewise a sort of family tradition handed on from generation to generation. Number of Workers. According to the results, the number of workers under the employ of the home based industry range from 1 up to 16 and above. Majority of the entrepreneurs (14 or 70 percent) are shown to have from to 10 employees working for them, while five (5 or 25 percent) have only 1 up to 5 employees. There is only one (1 or 5 percent) among the home based entrepreneurs who have 16 and more workers manning the operations of the business.

Considering the size of their workforce, home based industries are classified as micro to small enterprises. Because most of these ventures are family businesses, home based industries in the province have relatively limited operational scope. Number of Years in Operation. As shown by the obtained figures, most (17 or 85 percent) of the home based enterprises covered in this study have been operating for about 5 years and more. This finding implies that a big number of the businesses have established their market share or patronage. The rest of the respondent-enterprises are relatively new in the industry having been in operation for 1 up to a maximum of 4 years. Marketing Practices of the Home Based Industries in Ilocos Norte Tables 3.1 to 3.4 depict the results on the marketing practices of the 20 home based entrepreneurs along the four aspects namely, product, price, place and promotions. The

respondents indicated the frequency of their observance of each of the behavior reflective of their practice along the aforementioned aspects of marketing. Marketing Practices Along Product The different marketing practices of the respondents along the aspect of product are presented in Table 3.1 in terms of the obtained Likert mean scores. The marketing practices of the entrepreneurs along product were grouped into two practices relative to ensuring the quality of the product and the practices relative to the enhancement of the product by making it innovative. Table 3.1 Marketing Practices Followed by the Entrepreneurs Along Product Marketing Practices Along Product Quality of the product is ensured by Proper classification of raw materials Standard procedures on production Mean Descriptive Interpretation Often practiced Always practiced

4.35 4.80

Proper packaging and storage of finished products Product safety Cleanliness in the place of production Sub Mean Product is enhanced and made innovative through Additional variance in the products Continuously improving the proce4ss of production Procurement of guaranteed quality raw materials Adaptation and enhancement of products that are already available in the market Sub Mean Composite Mean Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50

4.22 5.00 5.00 4.67

Often practiced Always practiced Always practiced Always practiced

3.94 4.55 4.80 4.44 4.43 4.55

Often practiced Always practiced Always practiced Often practiced Often practiced Always practiced

Descriptive Always practiced Often practiced Sometimes practiced Seldom practiced Never practiced

Table 3.1 reveals that the practices along product are always practiced based on the obtained composite mean of 4.55. In terms of the practices relative to ensuring the quality of the product, the obtained mean score of 4.67, denoted that such are also always practiced by the entrepreneurs. In the case of the practices as to enhancing the product and made innovative, the obtained sub mean is 4.55, which likewise denoted that such behavior is always practiced. The highest means score of 5.00 was obtained with both the items which state that the entrepreneurs ensure the quality of their products by product safety and by cleanliness in the place of production. On the other hand, the practice which obtained the highest mean score of 4.80 along enhancing the product is the item which states that product is enhanced and made innovative through procurement of guaranteed quality raw materials, which is always practiced.

In contrast, the lowest mean score of 4.22, interpreted as often practiced was obtained with the item which states that quality of the product is ensured by proper packaging and storage of the finished products. Similarly, the item which states that product is enhanced and innovative through additional variance in products, obtained the lowest mean score of 3.94 in the cluster. The result denotes that such is often practiced. The findings imply that the entrepreneurs are aware of the importance of implementing desired marketing practices along product considering their significance in ensuring the viability and success of the home based industry engaged in. Marketing Practices Along Price Table 3.2 presents the results on the extent to which marketing practices along price are implemented by the entrepreneurs. Table 3.2 Marketing Practices Followed by the Entrepreneurs Along Price Marketing Practices Along Price Price is Based on costs incurred for production with minimal mark-up Based on the supply and demand Based on competitors' pricing scheme but at a lower price Based on the current price of the products Composite Mean Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50 Mean Descriptive Interpretation

4.16 4.28 3.17 4.20 3.95

Often practiced Often practiced Sometimes practiced Often practiced Often practiced

Descriptive Always practiced Often practiced Sometimes practiced Seldom practiced Never practiced

According to the results, practices along price are often practiced, based on the obtained composite mean of 3.95. The highest mean score of 4.28 was obtained with the practice wherein price is based on the supply and demand, although the item is often practiced. On the other hand, the item which states that price is based on competitors pricing scheme but a lower price obtained the lowest mean score of 3.17, denoting that such is sometimes practiced only. The findings imply that the home based entrepreneurs possess marketing acumen such that they are very much aware of the different forces which must be handled and confronted with price. Marketing Practices Along Place The different marketing practices which are followed by the entrepreneurs along place are subdivided into five aspects in terms of the practices relatives to how the place of distribution is made attractive to customers, how the place is improved, channels of distribution, methods of distribution and mode of transportation. Table 3.3 presents the results. As gleaned from the table, the composite mean of 4.03, obtained with the marketing practices along place, indicated that overall, these practices are followed or implemented often by the respondents. As regards making the place of distribution attractive to customers, the practices are always put into action, as all three cited practices revealed similar interpretation of the obtained mean scores. The findings denoted that the respondents observe cleanliness and sanitation and makes it a point to create a friendly atmosphere, good public relations and continuing efforts to improve the ambiance.

As to improvement of the place of distribution, the findings revealed that the marketing practices are carried out often based on the obtained sub mean of 3.97. The result shows that the respondents work on the expansion of their outlets and put up additional outlets in nearby locations. Table 3.3 Marketing Practices of the Entrepreneurs Along Place Marketing Practices Along Place Mean Descriptive Interpretation

Place of distribution is made attractive to customers by Continuously improving the ambiance 4.58 Always practiced Observation of cleanliness and sanitation 5.00 Always practiced Establish a customer - friendly atmosphere 5.00 Always practiced Requiring salespersons to have good public relations skills 4.90 Always practiced Sub Mean 4.87 Always practiced Place of distribution is improved by Expansion of outlets 4.26 Often practiced Putting up of additional outlets in nearby locations 3.68 Often practiced Sub Mean 3.97 Often practiced Channels of distribution Retailers or wholesalers only 4.56 Always practiced Distributors only 3.56 Often practiced Ultimate consumers only 3.72 Often practiced Sub Mean 3.95 Often practiced Methods of distribution Pick-up only 3.54 Often practiced Delivery only 4.15 Often practiced Pick-up and delivery 4.25 Often practiced Sub Mean 3.98 Often practiced Mode/s of transportation used in the delivery of products to consumers Hired jeeps/bus/tricycle 3.73 Often practiced Private cars/jeeps/trucks 4.06 Often practiced Public utility vehicle 3.02 Sometimes practiced Freight services 2.71 Sometimes practiced Sometimes Sub Mean 3.38 practiced Composite Mean 4.03 Often practiced

Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50

Descriptive Always practiced Often practiced Sometimes practiced Seldom practiced Never practiced

In terms of channels of distribution, retailers or wholesalers only are shown to be the channel that is always practiced as indicated by the obtained mean of 4.56. Often practiced by the entrepreneurs as to channel of distribution is that of relying on distributors only, as shown in the lowest obtained mean of 3.56. Collectively these practices are followed often. In terms of methods of distribution, the findings showed the different practices such as the use of pick-up and delivery obtained the highest mean score of 4.25, followed by delivery only with a mean of 4.15 and third is pick up only which obtained the mean of 3.54, although all were interpreted similarly. When it comes to the modes of transportation used by the respondents, the findings show that the preference is on private cars/jeeps or trucks which obtained the highest mean score of 4.06, denoting that such is often practiced. The lowest mean of 2.71 was obtained with freight services, denoting that their use as mode of distribution is sometimes practiced only. Marketing Practices Along Promotion The marketing practices along promotion were directed on product promotion, assessment of customer satisfaction, other customer services and approaches to maintain customer patronage. Results are shown in Table 3.4.

Table 3.4 Marketing Practices of the Entrepreneurs Along Promotion Marketing Practices Along Promotion Mean Descriptive Interpretation Sometimes practiced Seldom practiced Always practiced Sometimes practiced Often practiced Sometimes practiced Often practiced Often practiced Often practiced Often practiced Sometimes practiced Often practiced Often practiced

Product promotion is done by Advertising in broadcast media 2.59 Print media 2.50 Trade fairs and exhibits 4.76 Food tasting for free 3.50 Bonus packs 3.53 Sub Mean 3.38 Customers' satisfaction on the products is assessed through Interviews and feedbacks from customers 3.83 Customer preferences are based on the number of sales 4.13 Exposure to trade fairs and exhibits 4.50 Sub Mean 4.15 Other customer services Food tasting for free 3.36 Free delivery 3.95 Sub Mean 3.66 Approaches to maintain customer patronage Continuously improving the product /customer service quality 4.75 Maintain cleanliness of the place of product 4.33 Sub Mean 4.54 Composite Mean Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50 3.93 Descriptive Always practiced Often practiced Sometimes practiced Seldom practiced Never practiced

Always practiced Often practiced Always practiced Often practiced

According to the Table 3.4, the marketing practices relative to promotion are shown to be often practiced as revealed by the obtained composite mean of 3.93.

In terms of means in which product promotion is made, the practices are shown to be sometimes practiced only, as indicated by the sub mean of 3.38. The marketing practice which obtained highest mean of 4.76 is promotion by way of trade fairs and exhibits, which means that the entrepreneurs highly prefer such venues for the promotion of their products. The result is expected considering the advantages of joining trade fairs and exhibits wherein the entrepreneurs are given the opportunity to get in close contact with customers. Shown to be seldom practiced based on the lowest mean of 2.50 is product promotion through print media, which is understandable considering the cost involved. Practices along assessment of customer satisfaction are often practiced by the entrepreneurs, as indicated by the obtained sub mean of 4.15. Often practiced is the customer satisfaction assessment through trade fairs and exhibits as revealed by the highest obtained mean of 4.50. The findings imply that since they interact directly with customers during trade fairs and exhibits, one of their main goals is that of getting feedbacks as regards the product they can offer to the clients. Along other customer services, the marketing practices are done often as shown in the obtained sub mean of 3.65. The highest mean of 3.95 was obtained with free delivery, as an additional customer services that is provided by the respondents. Among the approaches that are carried out to maintain customer patronage, always practiced is the practice of continuously improving the product/customer service quality as indicated by the highest obtained mean of 4.75. Problems Encountered by the Home Based Industries in Ilocos Norte Tables 4.1 up to 4.3 reflect the results on the marketing problems which are encountered by entrepreneurs engaged with the various home-based industries.

The different problems were clustered into three- namely, the marketing problems met by the entrepreneurs along the four Ps of marketing price, place, product and promotion., second cluster includes the problems encountered with customers and thirdly, the problems

encountered by the entrepreneurs relative to production. Marketing Problems Along the 4 Ps The different marketing problems encountered by the home based entrepreneurs along product; price, place and promotion were determined and are discussed in this section. Table 4.1 below presents the results.

Table 4.1 Marketing Problems Encountered by the Entrepreneurs Problems Along Product Deteriorating quality over time Quality is dependent on the raw materials Quality is dependent on the production processes Sub Mean Along Price Difficulty in increasing price when cost of materials increases When cost of materials increase, there is standard pricing Sub Mean Along Place Cost of delivery Limited channel of distribution Unreliable delivery Sub Mean Along Promotion Expensive promotional strategies Identification of best promotional strategy Sub Mean Composite Mean Mean Descriptive Interpretation Moderately serious Moderately serious Highly serious Moderately serious

2.82 2.93 3.68 3.14

3.40 3.11 3.26 2.85 2.33 2.11 2.43

Moderately serious Moderately serious Moderately serious Moderately serious Slightly serious Slightly serious Slightly serious

3.00 3.22 3.11 2.99

Moderately serious Moderately serious Moderately serious Moderately serious

Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50

Descriptive Exceedingly serious Highly serious Moderately serious Slightly serious Not serious

Product. As gleaned from the table, the marketing problems of the respondents relative to the product are moderately serious, based on the obtained sub mean of 3.14. The highest mean of 3.68, which means it is highly serious, is the problem on quality being dependent on the production process. In contrast, the lowest mean of 2.82, was obtained with deteriorating quality over time, denoting that it is moderately serious. The findings imply that the production process is the most evident problem of the respondents, denoting that there are shortfalls in their procedural standards. Price. The results reveal that the marketing problems which the respondents encounter along price are moderately serious as shown by the obtained sub mean of 3.26. Between the two identified problems in this aspect of marketing, difficulty in increasing price when cost of materials increases, was rated higher than their problem with standard pricing when the cost of materials increase. The findings imply that the root cause of the entrepreneurs problems along price is the cost of raw materials for production as it affects greatly the price of their products. Place. Based on the results, the marketing problems encountered by the respondents are rated overall as slightly serious. The only problem rated to be moderately serious is cost of delivery, which is expected considering the escalating cost of fuel in the country. The lowest mean of 2.11 was obtained with the problem on unreliable delivery. This is because most of the

entrepreneurs make use of private cars, jeeps or trucks; hence they have a hold on them so that delivery can be made as scheduled. Promotion. As to promotion, the problems are deemed moderately serious as indicated by the obtained sub mean of 3.11. The problem on identification of best promotional strategy is rated higher than the problem on expensive promotional strategy. The findings imply that it is difficult for the respondents to determine the promotional strategy that would best work for them. Problems Encountered with Customers Table 4.2 reflects the problems encountered by the respondents with the customers. Based on the results, the problems with customers are moderately serious as indicated by the obtained composite mean of 3.08. Delayed payments obtained the highest mean of 3.50, although similarly interpreted as moderately serious. The findings imply that the entrepreneurs are able to deal with their customers and that even if there are difficulties met by them particularly as to attitude or behavior; these are handle4d by them accordingly. Table 4.2 Problems Encountered by the Entrepreneurs with Customers Problems Delayed payments Customer flight Arrogant customers Composite Mean Legend: Scale of Mean Values Interpretation 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 Mean 3.50 2.83 2.91 3.08 Descriptive Exceedingly serious Highly serious Moderately serious Descriptive Interpretation Moderately serious Moderately serious Moderately serious Moderately serious

1.51 - 2.50 1.00 - 1.50

Slightly serious Not serious

Problems Encountered with Production Based on the results presented in Table 4.3, the different problems encountered by the respondents relative to production are moderately serious as denoted by the obtained composite mean of 2.61. The highest mean of 3.08 was obtained with the problem on change in the weather which hinders their production. This problem nevertheless, is only moderately serious, which means it is manageable by the entrepreneurs. On the other hand, the lowest mean of 2.17, which means it is slightly serious, is the problem with no quality standard established. The findings imply that the hoe based entrepreneurs have the capability to handle their problems in production. Table 4.3 Problems Encountered by the Entrepreneurs in Production Problems Absence of a standard production process Poor technology/machinery used No quality standard established Fast turnover of labor Wastage Non-adherence to quality standard Change in weather Insufficient capital Composite Mean Legend: Scale of Mean Values 4.51 - 5.00 3.51 - 4.50 2.51 - 3.50 1.51 - 2.50 1.00 - 1.50 Mean 2.82 2.79 2.17 2.65 2.58 2.03 3.08 2.73 2.61 Descriptive Exceedingly serious Highly serious Moderately serious Slightly serious Not serious Descriptive Interpretation Moderately serious Moderately serious Slightly serious Moderately serious Moderately serious Slightly serious Moderately serious Moderately serious Moderately serious

Thus, overall, problems which are expected to crop up with home based industries like other business organizations do not pose a major threat or risk to the entrepreneurs. Perhaps because they were able to learn the rudiments of the business and they have acquired the acumen to run it, they have also learned about trouble shooting such that even when things go offhand, they are still in control of everything so that their operations are not affected significantly.

CHAPTER V SUMMARY, CONCLUSION AND RECOMMENDATIONS This chapter presents the summary of the findings and conclusions reached, and the recommendations offered based on the findings and conclusions made. Summary This study analyzed the marketing practices and problems of home based industries in Ilocos Norte. Specifically, the study answered the following sub problems: 1) What is the socio demographic profile of the entrepreneurs in terms of: age; sex; civil status; and highest educational attainment? 2) What is the business profile of the home based industries in terms of: ownership; line of business; capitalization; and number of years in operation? 3) What are the marketing practices followed by the entrepreneurs along with the product, pricing, place, and promotion? 4) What are the problems encountered by the entrepreneurs along with product, pricing, place and promotions? 5) What strategies can be proposed to enhance the marketability of home based industries? The nature of the research is descriptive research design because it looked into the marketing practices and problems of home based industries in Ilocos Norte.

Findings The salient findings of the study include the following: On the profile of business owners and their establishments. All of the business owners belong to the adult stage as their ages which range from 21, as the youngest, up to 60, as the oldest. The mean age was 44 obtained with the 20% frequency. Majority of the entrepreneurs were females with 18 or 90% of the distribution. 55% of the respondents are married and 45% of them are college graduates. 75% of the homes based entrepreneurs are sole proprietors. 65% of home based entrepreneurs are engage in food processing. Majority of the entrepreneurs are shown to have 6 to 10 employees working for them and 1 home based entrepreneur who has 16 workers. In the number of years of operations, 17 or 85% have been operating for 5 years and 3 or 5% are relatively new to in the industry for 1 up to 4 years. On the marketing practices followed by the home based entrepreneurs. As to the practices followed by the entrepreneurs along with product - the obtained composite mean of 4.55, indicated that they have always practiced these ways of ensuring the quality of product, enhancement and made innovative. In terms of pricing the obtained composite mean of 3.95, indicated that they often practiced their pricing methods. The different marketing practices which followed by the entrepreneurs along with place which is sub divided into five aspects in terms of the practices relative to how the place of distribution is made attractive to customers, how the place is improved, the channels of distribution, methods of distribution and mode of transportation the obtained composite mean of 4.0, indicated that overall, these practices are implemented often by the respondents. As to the practices implemented along with promotion were directed on product promotion, assessment of customer satisfaction, other customer

services and approaches to maintain customer patronage the obtained composite mean of 3.93, indicated that promotional practices were often practiced by the respondents. On the problems encountered by the entrepreneurs. The different problems were clustered into three namely the marketing problems met by the entrepreneurs along the four Ps of marketing product, price, place and promotion, second cluster includes the problems encountered with customers and thirdly, the problems encountered relative to production. The marketing problems along the 4 Ps obtained a composite mean of 2.99, indicated that overall these problems were moderately serious. On the problems encountered with the customers obtained a composite mean of 3.08, indicated that these problems relative to customers were moderately serious. On the problems encountered with production obtained a composite mean of 2.6, indicated that problems relative to production were moderately serious. Conclusions Based on the findings of the study, the following conclusions are drawn: Home based industries in Ilocos Norte can survive regardless of the presence of marketing problems. However they must not be easily contented with the pang isang kahig, isang tuka income. They must learn to think outside the box in order to view a wider market and acceptance of their home based products. To the neophytes in this kind of business they have to adopt strategies to its extent to make them enhancing their marketability. Recommendations From the foregoing findings and conclusions, the following are recommended: The researchers recommend that the entrepreneurs must learn to compete by differentiation, enhanced value proposition, unique products and a friendly atmosphere. The packaging of the home based products should be developed with appropriate aesthetics to

further attract consumers. They should observe standardized production procedures to ensure the quality of their products. They should do further researches on how innovate to attract buyers from surrounding communities. The Department of Trade and Industry must implement campaigns in patronizing home based products thru proposing its value and uniqueness. They must have knowledge on market conditions and keep updated with the changes in trends. The agency should also conduct seminars especially on food safety to educate the entrepreneurs on proper handling of foods. The local government unit, as a support in uplifting the home-based products, should also implement a policy to hotel owners, souvenir shops or in areas where tourist visits, to offer it. They should provide support for industrial linkages of SMEs with leading local operational industries to strengthen and improve SME operational environment. Develop SME financing support programs and strengthen the institutions that provide direct and appropriate financial services to SMEs.

BIBLIOGRAPHY Books Azarcon, Ernie Roy B., et al., 2008. Entrepreneurship Principles & Practices (A Modular Approach), 2nd edition. Baguio City: Valencia educational Supply. Kotler, Philip and Keller, Kevin Lane. 2006.Marketing Management,12th edition. New Jersey: pearson Education Inc. Lamb, Hair, McDaniel, 2010 Medina, Roberto, 2008. Entrepreneurship and Small Business Management. Quezon City: Rex Printing Company.

Internet www.dti.gov.ph/NSO Industry and Trade Statistics Department, 2009) www.learnmarketing.com/porter5forces

http//en.wikipedia.org./wiki/invisiblehand

APPENDICES

APPENDIX A LETTER REQUEST TO THE DTI FOR THE LIST OF HOME BASED INDUSTRIES IN ILOCOS NORTE July 28, 2011 Engr. Benjamin Garcia Provincial Director Department of Trade and Industry Ilocos Norte Dear Sir: The undersigned are fourth year students of School of Business and Accountancy, Divine Word College of Laoag and currently taking up the subject BA OO9 Introduction to Business Research. We would like to ask permission from your good office for us to conduct our study entitled Marketing Practices and Problems of Home-Based Industries in Ilocos Norte. In line with this, may we request for the list of registered small and medium enterprises with their line of business/production. Thank you very much for your support to this academic endeavor.

Respectfully yours, (Sgd.)Catherine V. Hidalgo (Sgd.)Jefferson E. Ilac (Sgd.)Venice Pauline F. Luis (Sgd.)Madelynne M. Miguel (Sgd.)Raina Krista G. Pedro (Sgd.)Evangeline G. Simeon

(Sgd.)Dr. Sylvia Lalaine Grace L. Foronda Thesis Adviser Noted by: (Sgd.)Prof. Frelyn L.Ranay Dean, School of Business and Accountancy

APPENDIX B LETTER REQUEST TO THE RESPONDENTS

Dear Sir/Madam, Greetings with peace! We, the students of Bachelor of Science in Business Administration from Divine Word College of Laoag, are conducting our research entitled: STRATEGIES TO ENHANCE THE MARKETING PRACTICES AND PROBLEMS OF HOME-BASED INDUSTRIES IN ILOCOS NORTE. We would like to ask your help by answering our questionnaire about the marketing practices adopted and the problems you encounter with regards to your homebased business. Rest assured that the data we will gather from you will be kept confidential and for reference purposes only. Thank you for your consideration. Good day and God Bless you.

Respectfully yours,

(Sgd.)Catherine V. Hidalgo (Sgd.)Jefferson E. Ilac

(Sgd.)Madelynne M. Miguel (Sgd.)Raina Krista G. Pedro

(Sgd.)Venice Pauline F. Luis

(Sgd.)Evangeline G. Simeon

(Sgd.)Dr. Sylvia Lalaine Grace L. Foronda Thesis Adviser Noted by: (Sgd.)Prof. Frelyn L.Ranay Dean, School of Business and Accountancy APPENDIX B QUESTIONNAIRE INSTRUCTIONS: This questionnaire is designed to gather information in the present status of the Marketing practices and problems encountered by the home-based industry owners in Ilocos Norte. Please put a check ( ) or write the answer(s) in the spaces provided for. Part I. Personal Profile of Entrepreneurs/Vendors Name (optional): Age: ______ 20 below ______ 21 25 ______ 26 30 ______ 31 35 ______ 36 40 ______ 41 45 ______ 46 50 ______ 51 55 ______ 56 60 ______ Above 61 _______ _________________________________

Gender:

( ) Male

( ) Female ( ) Married ( ) Widow(er) ( ) Separated

Civil Status:

( ) Single

Educational Attainment: ( ) Elementary Level

( ) Elementary Graduate ( ) High School Level ( ) High School Graduate ( ) College Level ( ) College Graduate : Degree Completed: __________________________

Part II. Business Profile 1. Ownership _______ Sole Proprietorship _______ Partnership _______ Cooperative ______ Corporation 2. Line of business _______ Food processing _______ Handicraft _______ Pottery 3. Number of Workers _______ 1 5 _______ 5 10 _______ 11 15 _______ 15 above 4. Number of years in operation ______ 1 2 34 above 5

PART III: MARKETING PRACTICES Instructions: encircle the numerical rating corresponding to the frequency of observance of each of the given behavior based on the following scale: 5 always; 4 often; 3 sometimes; 2 seldom; 1 never

PRICE Strategies in pricing the product. Base on costs incurred production with minimal mark up
Base on the supply and demand

5
5

4
4

3
3

2
2

1
1

Base on competitors pricing scheme but at a lower price

Base on the prevailing price of the product Keeping the price of the product to close to the profit margin set by the LGU

PRODUCT How do you enhance and make your product innovative? Accurate blending of ingredients Additional flavors Maintain the quality of product 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1

How do you sustain the excellent value of the product?

Purchase of quality of ingredients Proper treatment and storage Continuously improving the process of production Customers satisfaction over the product Interviews and feedbacks from consumers Customer preferences are based on the number of sales Exposure to trades fairs and exhibit Approaches to maintain customer foods Continuously improving the product quality/ customer service Maintain cleanliness of the place of product

5 5 5

4 4 4

3 3 3

2 2 2

1 1 1

5 5

4 4

3 3

2 2

1 1

PLACE How do you improve safety and sanitation of your product? Cleanliness is always observed
Improve the handling of the product

4
5

3
4

2
3

1
2 1

How do you improve and innovate your distribution and place? Putting up of outlet/s Additional manufacturing location Additional distribution channels 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1

What are your channels of distribution? Retailers or wholesalers only Distributors only Ultimate consumers only All of the above 5 5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 1 1 1 1

Methods of distribution Pick up only Delivery only Pick up and delivery Free delivery 5 5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 1 1 1 1

Modes of transportation used to deliver the products to your consumers

Hired jeeps/bus/tricycle Private cars/jeeps/trucks Public utility vehicle Freight services

5 5 5 5

4 4 4 4

3 3 3 3

2 2 2 2

1 1 1 1

PROMOTION How do you promote your product? Advertising in broadcast media Print media Trade fairs and exhibits 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1

Food tasting for free Bonus packs Food tasting for free

5 5 5

4 4 4

3 3 3

2 2 2

1 1 1

IV. PROBLEMS ENCOUNTERED IN: Instructions: encircle the numerical rating corresponding to the frequency of observance of each of the given behavior based on the following scale:5 exceedingly serious; 4 highly serious; 3 moderately serious; 2 slightly serious; 1 not serious PRICE Problems encountered in setting the price Difficulty in increasing price when material costs increases When materials increases there is no standard pricing

Delayed payments of customers PRODUCT Problems on the product Easy spoilage Deteriorating quality over time Quality is dependent on the raw materials Quality is dependent on the production processes No standard production process

5 5 5

4 4 4

3 3 3

2 2 2

1 1 1

5 5

4 4

3 3

2 2

1 1

Poor technology/ machinery used in production No quality standard established in production Fast turnover of labor Wastage No adherence to quality standard PLACE

5 5 5 5 5

4 4 4 4 4

3 3 3 3 3

2 2 2 2 2

1 1 1 1 1

Problems encountered in the distribution of the product Cost delivery No enough channel of distribution Unreliable delivery Change in weather PROMOTION Problems encountered in promoting your product Expensive promotional strategies Identification of best promotional strategy Customer flight Arrogant customers 5 5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 1 1 1 1 5 5 5 5 4 4 4 4 3 3 3 3 2 2 2 2 1 1 1 1

APPENDIX D LIST OF HOME BASED INDUSTRIES IN ILOCOS NORTE

NAME OF FIRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Cormel Foods Lucky Theo Food Products Muebles Yloco Sarrat Binakol Association Sugarcane Products Producers Association Scufynd Food products Lutong paoay Chichacorn Nagbacalan Loomweavers MPC Aleli Joy's Inabel Victor Angel's Cornick Supreme Lutong Ilocos Namnam's Food products Nana Rosa's Cornick Asosasyon ti Agar-aramid ti Arak Saud shellcraft producers Association Del Mar Mother shellcraft MPC Adam's Tigergrass Broommakers Ass. Golda's Marketing Golda's noodle factory Basilio's Meat Product Pascua Meat products Glory' Empanada Glomy's emapanda San nicolas Bawang Association Elan gardens Ref mad farms Gladfood Products Colyn Food Products Sagpat Honey Collectors Association barangay Nutrition scholars Currimao Native Delicacies Association Siwawer Garlic Association Burgos Local Council for Women San nicolas damilian Association Ama Joe pork skin Rouesa's Puto Veronica's Ceramics Mumulaan MPC ADDRESS 54 Andres Castro St. laoag City Brgy. Binacag, banna, Ilocos Norte Brgy. 1, San Nicolas, Ilocos Norte Sarrat, Ilocos Norte Brgy. Cabungaan-B, laoag Citry Brgy. Sinamar, Banna,Ilocos Norte Brgy. Salbang,M Paoay, Ilocos Norte Brgy. Nagbacalan, Paoay,Ilocos Norte Brgy. Nagbacalan, Paoay,Ilocos Norte Brgy. Salbang,M Paoay, Ilocos Norte Brgy. Salbang,M Paoay, Ilocos Norte Brgy. Salbang,M Paoay, Ilocos Norte Brgy. Salbang,M Paoay, Ilocos Norte Adams, Ilocos Norte Brgy. Saud,Pagudpud,Ilocos Norte Brgy. Saud,Pagudpud,Ilocos Norte Adams, Ilocos Norte Brgy. Barani, Batac,Ilocos Norte Brgy. Barani, Batac,Ilocos Norte Brgy. 6,San Nicolas, Ilocos Norte Brgy. 6,San Nicolas, Ilocos Norte Poblacion, Batac,Ilocos Norte Poblacion, Batac,Ilocos Norte Poblacion, San Nicolas,Ilocos Norte Brgy. Bil-loca, Batac City Brgy. Paaya, Burgos, Ilocos Norte Magat salamat, laoag City Piddig, Ilocos Norte Brgy. Sagpat, Vintar, Ilocos Norte Poblacion, Solsona,Ilocos Norte Poblacion, Currimao,Ilocos Norte Brgy.6, Vinmtar, Ilocos Norte Poblacion, Burgos, Ilocos Norte Brgy. 8, San Nicolas, Ilocos Norte Brgy. Payas, San Nicolas, Ilocos Norte Magat salamat, laoag City Brgy. Veronica, Paoay, Ilocos Norte Brgy. Mumulaan, Paoay, Ilocos Norte

39 40 41 42 43 44 45 46

Camguidan MPC Bagnos MPC Camanga MPC Manampa MPc Balaoi DASARAP Weavers and Users ASS. Asosasyon ti Partuat ti E-Kawayan San Juan MPC San Roque MPC

Brgy. Camguidan, Batac City Brgy. Binacag, banna, Ilocos Norte Brgy. Camanga, Badoc, Ilocos Norte Brgy. Nambaran, Bacarra, Ilocos Norte Brgy. Balaoi, Pagudpud, Ilocos norte Brgy. Baruyen, Bangui, Ilocos Norte Brgy. San Jose, Sarrat, Ilocos Norte Brgy. San Roque, Sarrat, Iloco

CURRICULUM VITAE

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Catherine Villaran Hidalgo : Brgy. 23 San Matias Sitio Dungtal, laoag City : November 29, 1990 : Las Pinas, Metro Manila : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: DIVINE WORD COLLEGE OF LAOAG School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in MANAGEMENT ACCOUNTING 2009-Present DIVINE WORD COLLEGE OF LAOAG Laoag City, Ilocos Norte 2003-2007 DIVINE WORD COLLEGE OF LAOAG Laoag City, Ilocos Norte 2001-2003

Secondary:

Elementary

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Jefferson Espejo Ilac : Brgy. 7, San Nicolas I.N : December 27, 1991 : Badoc, Ilocos Norte : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in MARKETING MANAGEMENT 2008-Present San Nicolas National High School San Nicolas, Ilocos Norte 2004-2008 Elementary: Filipinas Elementary School San Nicolas, Ilocos Norte 1998-2004

Secondary:

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Venice Pauline Flores Luis : Brgy. 23, Sitio Dungtal, Laoag City : June 29, 1992 : Laoag City : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in FINANCIAL MANAGEMENT 2008-Present Ilocos Norte College of Arts and Trades Laoag City, Ilocos Norte 2004-2008 Gabaldon Elementary School Laoag City, Ilocos Norte 1998-2004

Secondary:

Elementary:

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Grace Mendoza Mabuti : Brgy. 81 Lagasca St. Laoag City : October 22, 1991 : Batac : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in FINANCIAL MANAGEMENT 2008 - Present Ilocos Norte College of Arts & Trades P. Gomez St. Laoag City 2004 - 2008 Mariano Marcos State University Laoag City, Ilocos Norte 1998 - 2004

Secondary:

Elementary:

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Madelynne M. Miguel : Brgy. 39, Pasiocan, Bacarra, Ilocos Norte : March 21, 1989 : Bacarra, Ilocos Norte : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in MANAGEMENT ACCOUNTING 2008-Present Ilocos Norte College of Arts and Trades Laoag City, Ilocos Norte 2001-2005 Pasiocan Elementary School Bacarra, Ilocos Norte 1996-2001

Secondary:

Elementary:

CURRICULUM VITAE

PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Raina Krista Gerardo Pedro : Brgy. 29 Rizal St., Laoag City, Ilocos Norte : March 30, 1992 : Laoag City : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in FINANCIAL MANAGEMENT 2008-Present Saint Joseph High School Laoag City, Ilocos Norte 2004-2008 Plaridel Elementary School Laoag City, Ilocos Norte 1998-2004

Secondary:

Elementary

CURRICULUM VITAE

PERSONAL INFORMATION Name : Evangeline Andrea Galvez Simeon Address : Brgy. 51-A, Nangalisan Laoag City Date of Birth : November 19, 1991 Place of Birth : Laoag City Civil Status : Single Citizenship : Filipino EDUCATIONAL ATTAINMENT Tertiary: Divine Word College of Laoag School of Business and Accountancy Laoag City, Ilocos Norte Bachelor of Science in Business Administration Major in FINANCIAL MANAGEMENT 2008 - Present Holy Spirit Academy of laoag Laoag City, Ilocos Norte 2004-2008 Holy Spirit Academy of Laoag Laoag City, Ilocos Norte 1998-2004

Secondary:

Elementary:

CURRICULUM VITAE PERSONAL INFORMATION Name Address Date of Birth Place of Birth Civil Status Citizenship : Krystle Fieldad Valdez : Brgy. 16 Villanueva St. Laoag City : December 4, 1982 : Sanchez Mira, Cagayan : Single : Filipino

EDUCATIONAL ATTAINMENT Tertiary: DIVINE WORD COLLEGE OF LAOAG School of Business and Accountancy Bachelor of Science in Business Administration Major in: Management Accounting 2006 Present ILOCOS NORTE NATIONAL HIGH SCHOOL Laoag City 1996 2000 LAOAG CENTRAL ELEMENTARY SCHOOL Laoag City 1991 - 1996

Secondary:

Elementary: