Sacred Heart College

A study on the level of effectiveness of different strategies of small online businesses

in Lucena City to improve their customers’ satisfaction

A Quantitative Research
presented to the Senior High School Department
Sacred Heart College
Lucena City

In partial fulfilment of the requirements

for the subject
CT5: Practical Research II

Albania, Eunice Kyle B.

Catapang, Sophia Alyanna P.
de Ocampo, Janine O.
Pilapil, Ericka P.
Obnias, Sofia Cassandra P.
Zabalerio, Franxine Yzabel F.

Jherojld O. Alba
Research Adviser

December 2020
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CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

Social media is known as an online platform used as the modern way of

communication and sharing the latest news and information. Now, the social media can

give one person the access to almost everything. Through social media, an individual can

follow the artists he admire, have the freedom to speak, find job opportunities, purchase

necessary things without stepping out of their house, and lastly, an individual can start

and promote his own online business.

Online business also known as e-commerce refers to any business conducted

through the internet. This includes online selling of products, online purchases, online

advertising or marketing, and even online transactions in terms of payments. The number

of online businesses has become relevant in the past years and has increased rapidly

during this time of pandemic. During the COVID-19 pandemic and community

quarantine, people became more dependent on buying goods online and starting small

online businesses as it is their another source of income to sustain their daily needs

amidst the pandemic.

As the number of small online businesses are increasing, customer satisfaction is

the best way to retain a small online business, make it grow and known. Customer

satisfaction defines how the customer feels after purchasing a product from a certain

business or store. It plays the biggest role in creating strategies of which online

businesses' are going to use to improve their sales. There are certain factors and strategies
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that can improve the customers' satisfaction which leads them to another purchase of an

online business' product. According to Ting, et. al., (2016), online retailers are

encouraged to concentrate on providing meaningful guarantee, promptly entertain online

shoppers’ inquiries and problems and convenient options for returning the purchased

items. e-Service Quality (e-SQ) significantly influenced e-Satisfaction of online

shoppers, which in turn affected their e-Loyalty and e-Loyalty of online shoppers is

affected by the extent to which they are satisfied with the online transaction with the

online retailers.

It is important for manufacturers to improve the quality of products so that

consumers can express positive attitudes in their comments. Related to some

characteristics of experience products, such products are usually easy to consume and

replace. Therefore, when producing these types of products, manufacturers should

accelerate research and development efforts and render the functions of their products

superior to those of other competitors on the market, and retailers must stimulate

consumption with certain price concessions or other promotional policies. When a retailer

mainly sells some types of search products, relevant policies should be implemented to

promote consumer appraisals of existing comments. (Li, et. al., 2020). Managers should

carefully consider the attributes of e-service quality to develop their online stores. To

provide superior service quality, companies should provide an excellent website design

that consists of sufficient information, visually appealing content, easy to make

payments, easy to read text, offer some discounts and/or promotions, and quick loading

capacity. Beyond that, companies must ensure the timeliness of delivery and ensure the

customers’ data security and privacy. (Rita, et. al., 2019)

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Now that small online businesses started to emerge, one of the most significant

scheme they should do is to satisfy their beloved customers in order to make their online

business known and trusted. However, they may experience difficulties in terms of

maintaining their customers since the majority of them are new to the industry. Most of

them lack knowledge and ideas about the correct strategies and techniques they can

utilize to make their customers satisfied and to make their business expand.

This study aims to find the level of effectiveness of the different strategies used

by small online businesses to improve their customer satisfaction. In addition, the

researchers aim to discover if there is a relationship between customers’ satisfaction and

the sales of a small online business and how it affects the reputation of an online

business. At the end of the study, the researchers also intend to help small online

businesses to improve their strategies towards customer satisfaction and bring awareness

to everyone especially to the young and new entrepreneur and to those who are loyal in

buying products online about how their satisfaction and reviews affects and helps a

business.

Statement of the Problem

The researchers seek to find the level of effectiveness of different strategies used by

small online businesses in Lucena City in order to improve their customers’ satisfaction.

This research seeks to answer the following questions:

1. What is the level of effectiveness of the following strategies used by online

businesses in Lucena City in improving their customers’ satisfaction:

1.1 Kindness and patience of seller

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1.2 Affordability of products

1.3 Transparency

1.4 Flexibility

1.5 Discounts and freebies

2. What is the degree of importance of customers’ satisfaction in the following traits

of online businesses in Lucena City:

2.1 Sales

2.2 Reliability

2.3 Popularity

3. Is there a significant relationship between customer satisfaction and sales of their

online business?

4. Based on the findings of the study, what output can be made by the researchers?

Hypothesis
Before the research proceeds and arrives at a conclusion, the researchers have
enumerated the following hypothesis based on statement of the problem, in relation to the
present variables in the study.

H0: There is no significant relationship between the level of effectiveness of different

strategies used by small online businesses in Lucena City and their improvement of
customer’s satisfaction.

H1: There is a significant relationship between the level of effectiveness of different

strategies used by small online businesses in Lucena City and improvement of their
customer’s satisfaction.

Conceptual Framework
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According to Lim, et. al., (2016) from the study “Customers' online website

satisfaction in online apparel purchase: A study of Generation Y in Malaysia”, there is a

significant relationship between website usability and online website satisfaction.

Therefore, the online apparel industry should further improve website usability to satisfy

online shoppers. The online apparel industry should also take privacy and security issues

on the sites seriously. It is important that the transaction or payment is made strictly

impersonal and anonymous. In short, strong and improved website security could create

customer trust and ability to build long-term relationships with online customers.

Nowadays, service quality on a website has become indispensable in satisfying online

consumers or shoppers. Apparel websites are strongly advised to provide superior e-

services to online customers, such as prompt service responses to customers' requests. If

the company or owner is unable to provide real-time customer services, they can put a

telephone service hotline number on their webpage where it can be identified easily by

online customers. This allows customers the opportunity to ask questions regarding

products and services if they have any doubts about the products. Most important, a

website owner should maintain the quality of services provided, because a good service

should be able to persuade customers to repeat purchases in future. By achieving the

criteria mentioned earlier, the online apparel website provider might be more competitive

in the industry or market. This is because if they are able to meet the perceptions and

expectations of their online customers, with regard to usability, service quality, and

credibility, they can better satisfy online apparel shoppers.

The findings mentioned above is relevant to the study since it proved that factors

like: (1) security and credibility leads the shopper to trust the shop for his personal
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information in terms of transaction, (2) service quality helps customer regarding their

queries and concerns, and (3) usability results to convenience which makes the customers

satisfied. The findings relate to this study for the purpose of this study is to know the

level of effectiveness of different factors and strategies that affects the satisfaction of

customers.

Based on the findings of this research, user e-commerce satisfaction context

relates to six factors: information quality, system quality, service quality, product quality,

delivery quality, and perceived price. According to the findings of this study, the

customers consider the product and delivery more important; thus, e-commerce

proprietors should pay more attention to the product sourcing and cooperate with the

delivery supplier to provide a higher quality of delivery, such as correct order, timeliness,

and safety packaging. The implication for management is that customers’ sense of the

good buy and worthy product or service is likely to influence satisfaction of online

customers directly. Another implication is that when developing strategies to retain

online customers, management needs to develop not only high-quality e-commerce

system but also quality products, reliable delivery, and fair price. (Lin, et. al., 2010)

Another finding proved that information quality, system quality, service quality,

product quality, delivery quality, and perceived price helps online businesses improve

their customers’ satisfaction. Factors like delivery quality and system quality results to

trustworthiness of the online business. In addition, the factors mentioned guarantees the

customer that his purchase and its delivery terms will please his expectations which leads

to better online reviews and satisfaction.

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Conceptual Paradigm

INPUT PROCESS OUTPUT

1. What is the level of
effectiveness of the
following strategies used by
online businesses in Lucena  Using a  Researchers
City in improving their
customers’ satisfaction: questionnaire to will hold an online
1.1 Kindness and patience obtain sufficient data. seminar or
of seller
1.2 Affordability of presentation for those
products
1.3 Transparency
• Analysis of data who have an online
1.4 Flexibility from the business and those
1.5 Discounts and
freebies questionnaire. who want to build an
2. What is the degree of
importance of customers’ • Interpretation from online business.
satisfaction in the following
traits of online businesses the data obtained by
in Lucena City: the researchers.
2.1 Sales
2.2 Reliability
2.3 Popularity
3. Is there a significant
relationship between
customer satisfaction and
sales of their online
business?
4. Based on the findings of the

Figure 1. Input, Process at Output (IPO)model A study on the level of effectiveness of

different strategies of small online businesses in Lucena City to improve their
customers' satisfaction

Figure 1 shows the input, process and output model of "A study on the level of

effectiveness of different strategies of small online businesses in Lucena City to improve

their customers' satisfaction". The input indicates what the researchers will focus on to

get an answer for this study. This includes the strategies on how to improve the

satisfaction of the customers which is the focus of this study, the importance of

customers’ satisfaction, and lastly, the significant relationship between customer

satisfaction and sales of their online business.

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The process outlines what the researchers will do to provide results for the study.

The researchers will provide questionnaires to selected respondents to obtain sufficient

data to further expand the knowledge about to this issue. Analysis and interpretation of

the data gathered will be done by the researchers to determine the accurate answers to the

questions of this study.

The output includes the result of this study and that is to create an online

presentation about the effective strategies which small online businesses can use. The

selected respondents and those who are planning to start their business will have

knowledge about effective strategies for them to use and help them to make a difference

in their online business. This will also increase the level of awareness of everyone on

online businesses work and develop.

Scope and Limitations

The study which is “The study of level of effectiveness of different strategies of

small online businesses in Lucena City to improve their customers’ satisfaction” focuses

on how effective online businesses’ strategies are and how they can improve their

customers’ satisfaction to build strong relationship, earn e-loyalties and offer outstanding

e-service quality.

Lucena City is the capital city of Quezon Province located in Southern Luzon.

Lucena City is the preferred place of the researchers to conduct their study mainly

because this is where they reside and they are familiar to some online entrepreneurs

which are based in Lucena City. The selected respondents are small online entrepreneurs
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in Lucena City. They are relevant to the study because they perform strategies to improve

the sale of their online businesses.

The researchers use convenience sampling in choosing the respondents because

the researchers want the respondents that are available during their study. In order to

determine the level of effectiveness of different strategies of small online businesses in

Lucena City to improve their customers’ satisfaction, the researchers used questionnaires

which contains questions related to the main purpose of this study.

Researchers believe that customers’ satisfaction depends on how the online

entrepreneurs apply their strategies. Therefore, different strategies that can improve

customers’ satisfaction are included in the study.

The timeframe of the present study is until December 2020.

Significance of the Study

The study aims to know the different strategies of the small online business

owners to improve their customers’ satisfaction. The outcome of the study could be

highly significant and favorable to the following:

Online Business Owners. The findings of this study will help them gain knowledge

about the effectiveness of the strategies they use and its impact to the customers. Through

this study, they can improve their techniques and help them develop their decisions

whether to continue their techniques and strategies or not.

Students. This study will enlighten the knowledge of the students about online

businesses and its techniques. In addition to that, some students already have their online
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business and the findings of this study will be their guide in case that they would want to

improve the satisfaction of their customers.

Parents. This study is beneficial to the parents that the source of income is an online

business. This study can provide tips and strategies to improve their business.

Future Researchers. This study is favorable to the future researchers that aims to

develop this type of study. The ideas, findings, and results of this study can serve as their

reference in conducting a new study. In this study, the future researchers can gain enough

knowledge, and they will be given an overview on the different effective techniques by

online businesses and their impact to the customers.

Definition of Terms

The following terms are defined to have a clearer and better understanding of the

study:

Social media- social networking sites that could be used as great medium to promote

online businesses. This could also be useful for the sellers to stay connected with their

customers especially when there are concerns to discuss.

Online Business or e-commerce- online market where people could purchase or sell

products, properties, or services. It is a very convenient during the pandemic.

Pandemic- an outbreak of a disease that occurs over a wide geographic area (such as

multiple countries or continents) and typically affects a significant proportion of the

population.
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COVID-19- a mild to severe respiratory illness that is caused by a coronavirus (Severe

acute respiratory syndrome coronavirus 2 of the genus Betacoronavirus), is transmitted

chiefly by contact with infectious material (such as respiratory droplets) or with objects

or surfaces contaminated by the causative virus, and is characterized especially by fever,

cough, and shortness of breath and may progress to pneumonia and respiratory failure.

Community Quarantine- a restraint of participating to activities that usually needs to be

done outdoor for the whole community due to the COVID-19 pandemic.

Customer satisfaction- measurement that determines how happy customers are with a

company’s products, services, and capabilities. Customer satisfaction information,

including surveys and ratings, can help a company determine how to best improve or

changes its products and services.

e-Service quality- the quality of the products or services the online businesses offer to

their customers. If the quality is consistently good, it leads to customers’ loyalty.

e-Loyalty- repeated satisfaction of customers with purchases of products or services

which leads them to repurchasing the product and recommending it to their constituents.

Price concession- adjustment to the price agreed to in the letter of intent. It occurs during

or after due diligence, but before closing of the transaction. Typically, these adjustments

are reductions of the price, but they may also be increases.

Appraisal- a valuation of property by the estimate of an authorized person.

Website design- process of creating websites. It encompasses several different aspects,

including webpage layout, content production, and graphic design.

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