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Cabuyao
KatapatanSubd., Banay-Banay, Cabuyao, Laguna

1 COLLEGE OF BUSINESS ADMINISTRATION

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The researcher came up with the conclusion of the analysis comparing the online selling
and personal selling that provide a better understanding of using online selling and personal
selling that is a traditional way of transacting business.

Background of the Study

“The aim of marketing is to know and understand the customer so well the product or
service fits him and sells itself.” -Peter Drucker.

The evolution of selling had several distinct phases of development during the course of
late 19th and 20th centuries. Industrial revolution of late 19th century caused a tremendous
amount of exchange of goods between people and nations all over the world.

Online shopping was invented and pioneered by Michael Aldrich in the UK. In 1979 he
connected a modified domestic television via a telephone line to a real- time multi-user
transaction processing computer. He marketed the system from 1980 onwards and sold mainly
Business-to-Business systems. However from 1960s a new age in the area of selling has started.

The focus of the salesperson is on the sales effort, while the support functions are taken
care of by other team members. This approach benefits the companies as the team members try
to achieve higher level of satisfaction. By using this approach, the salesperson can position their
brand name in a better way. A salesperson is required to meet their customer’s expectation. He
provides value added services to the buyers while selling the products. It simply refers to giving
something extra to the buyers as they expect or perceive.

As per this approach, the salesperson acts as consultant or problem solver. Their job is to
match their product or services to the specific needs of customers. Generally, every customer has
a problem in hand and he seeks for solution. Salesperson needs to solve these problems, which
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can be done only if the salesperson clearly understands the problem. This type of approach is
quite popular as a win-win scenario is highlighted for both the buyer and the seller. Also, this
approach is applied where the main focus is on the problems faced by the prospects and not on
the features of the products that are offered by the sellers. (Ed Rigsbee of Rigsbee Enterprises
Inc. USA)

While, personal selling according to Kotler and Keller (2014) is the best tool for two-way
communication. Salesman can provide necessary information to customer about company’s offer,
and also can collect information from customer. Customer can actively involve with salesman to
solve his doubts and objections. It is not possible in any other methods of market promotion.
Personal Attention advertising and publicity are among mass communication tools. They do not
cater individual needs. Personal selling focuses on personal problems of customers. It is
comparatively more effective and result-oriented.
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Theoretical Framework

Balanced Scorecard Theory

The researchers affixed this paper with the balanced scorecard theory. In this theory, its
design is flexible enough not to be limited by it. The balanced scorecard was first introduced by
accounting academic Dr. Robert Kaplan and business executive and theorist Dr. David Norton. It
was first published in 1992 in a Harvard Business Review article. Dr. Kaplan and Dr. Norton
took previous metric performance measures and adapted them to include nonfinancial
information.

The Four Legs of the Balanced Scorecard. Information is collected and analyzed from
four aspects of a business. First, learning and growth are analyzed through the investigation of
training and knowledge resources. This first leg handles how well information is captured and
how effectively employees utilize the information to convert it to a competitive advantage over
the industry. Second, business processes are evaluated by investigating how well products are
manufactured. Operational management is analyzed to track any gaps,
delays, bottlenecks, shortages or waste.

Third, customer perspectives are collected to gauge customer satisfaction with quality,
price and availability of products or services. Customers provide feedback regarding if their
needs are being met with current products. Finally, financial data such as sales, expenditures and
income are used to understand financial performance. These financial metrics may include dollar
amounts, financial ratios, budget variances or income targets. These four legs encompass the
vision and strategy of an organization and require active management to analyze the data
collected. Therefore, the balanced scorecard is often referred to as a management tool, not a
measurement tool.
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The balanced scorecard concept arose out of a recognized need to measure success on
more than just financial statements. Focusing strictly on financial results doesn't provide an
organization with the information that it needs to prosper in today's environment. Financial
results provide an indication of past performance, but don't provide you with insight into your
current status or where you'll likely be in the future. In addition, the balanced scorecard provides
a framework and language that enable you to describe your strategy in a consistent, reliable
manner.

The ultimate goal behind balanced scorecard theory is to measure the factors that create
value for an organization and directly influence its ability to prosper. To do that, you must
determine the answer to these questions:

Where is the organization going? What is our strategy? What do we need to do well to
achieve our strategy?

In addition to balancing your strategy, the objects that you use to measure your success
should be balanced, and you should take into consideration:

Performance drivers (leading indicators) and outcomes (lagging indicators).An effective

balanced scorecard needs a combination of both performance drivers and outcome measures.
Without outcome measures such as profitability, market share, or customer satisfaction, among
others, a scorecard does not provide an indication of how well the organization is performing.
Without performance drivers, such as objectives that are categorized within the internal and
learning perspectives, you don't have an indication of whether your strategy is working.
Performance drivers also communicate what steps are required to achieve the strategy .Internal
and external indicators. Try to balance measures across indicators internal to your organization,
such as sales growth rate, as well as those that are external, such as stock price or customer
satisfaction rating. Qualitative and quantitative measures. Try to include measures that provide
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both qualitative information, such as employee satisfaction level, and quantitative information,
such as sales amount.
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Conceptual Framework

The conceptual framework explain the ONLINE SELLING AND PERSONAL SELLING: A
COMPARATIVE ANALYSIS in the City of Cabuyao, Laguna. The conceptual paradigm is
illustrated below:

INPUT PROCESS OUTPUT

INPUT1.respondent;
What is the demographic Profile of the
 Gather A comparative
1.1 Age;
1.2 Gender; information analysis of
1.3 Civil status; and
1.4 Business through Online selling
2. What are the performance of online selling survey. and Personal
in terms of;  Data Analysis selling
2.1 Serviceability;
2.2 Marketing strategy;  Statistical
2.3 Publicity;
2.4 Patronization; Tools
2.5 Mark Up
2.6 Capitalization
2.7 Cost Efficiency; and
2.8 Profitability

3. What are the performance of personal

selling in terms of:

3.1 Serviceability;
3.2 Marketing strategy;
3.3 Publicity;
3.4 Patronization;
3.5 Mark Up
3.6 Capitalization
3.7 Cost Efficiency; and
3.8 Profitability

4 Is there any significant difference between

online selling and personal selling in terms of
performance?

FEEDBACK

Figure 1; The Research Paradigm

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8 COLLEGE OF BUSINESS ADMINISTRATION

Statement of the Problem

The study aim to determine the comparative analysis between online selling and personal
selling.

The study sought to answer the following questions:

1. What is the demographic profile of the respondents?

1.1 Age;

1.2 Gender;

1.3 Civil status; and

1.4 Business

2. What is the performance of Online selling in terms of;

2.1 Serviceability;

2.2 Marketing strategy;

2.3 Publicity;

2.4 Patronization;

2.5 Mark Up

2.6 Capitalization

2.5 Cost Efficiency; and

2.6 Profitability
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3. What is the performance of Personal selling in terms of;

3.1 Serviceability;
3.2 Marketing strategy;
3.3 Publicity;
3.4 Patronization;
3.5 Mark Up
3.6 Capitalization
3.7 Cost Efficiency; and
3.8 Profitability

4. Is there any significant difference between online selling and personal selling in terms of
performance?

Objectives of the Study

The objectives of this study are the following:

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1. To determine the Demographic profile of the respondents?

1.1 Age;

1.2 Gender;

1.3 Civil Status; and

1.4 Business

2. To determine the performance of Online selling in terms of:

2.1 Serviceability;

2.2 Marketing strategy;

2.3 Publicity;

2.4 Patronization;

2.5 Mark Up

2.6 Capitalization

2.7 Cost Efficiency; and

2.8 Profitability

3. To determine the performance of Personal selling in terms of;

3.1 Serviceability;
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3.2 Marketing strategy;

3.3 Publicity;

3.4 Patronization;

3.5 Mark Up

3.6 Capitalization

3.7 Cost Efficiency; and

3.8 Profitability:

4. To determine if there is any significant difference between online selling and personal selling
in terms of performance.

Hypothesis
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Alternative Hypothesis

There is a significant difference between the online selling and personal selling according to the
study.

Null Hypothesis

There is no significant difference between the online selling and personal selling according to the
study.

Significance of the Study

The findings of the study will be beneficial to the following recipient and readers on
online selling and personal selling.
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The Entrepreneurs. This will serve as background information for the awareness of a
more effective way of business transaction.

The Consumer. This study will give information and it will also help them purchase
product wisely.

The Unemployed. The study provide job to the unemployed by producing and improving
their skill at the same the increasing their productivity.

The Researchers. The researcher will gain more benefits from this study. It would
become useful for them to develop their knowledge about the improvement of the program.

The Future Researcher. The study will serve as their guidelines and basis for conducting
their own research and additional source to their related studies in future research.

The College of Business Administration and Accountancy. This study is a new

contribution to the field of research and will serve as a new intervention.

The Government. The result of the proposed study will help local government in terms
of adding for promoting and developing local community.

Scope and Limitation

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The study focuses on the comparison of online selling and personal selling and to know
what is more effective as a business transaction. The respondents are the online and personal
seller of clothing. It is to be conducted at City of Cabuyao Laguna during the year 2018.

This study aim to provide an information that is useful to the consumer as well as to the
new businessman that gives a perspective which more accessible and more profitable.

Definition of terms
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The following terms are arranged chronologically and are used in the study as defined by
the researcher for the convenience of the reader and for facilitating their understanding of the
study.

Capital. It is the money or wealth needed to produce goods and services.

Cost Efficiency. It is aimed at minimizing advertising expenses incurred while maximizing

product publicity to a target market in terms of breadth and frequency of exposure. Maximizing
cost efficiency in a marketing campaign is highly desirable for a business since the greatest
product exposure is achieved for the least amount of financial investment. The act of saving
money by making product or performing an activity in a better way.

Expense. Money spent or cost incurred in an organization's efforts to generate revenue,

representing the cost of doing business.

Marketing Strategy. A business overall game plan for reaching people and turning them into
customers of the product or service that the business provides. The marketing strategy of a
company contains the company’s value proposition, key marketing messages, information on the
target customer, and other high level elements. The marketing strategy informs the marketing
plan, which is a document that lays out the types and timing of marketing activities.

Mark-up. Refers to the value that a player adds to the cost price of a product.

Online business. Online business - also referred to as e-business - is any kind of business
activity that happens online (over the internet). A business owner who does any, or all, of their
business using the internet, is running an online business.

Patronization. It is a regular customer who purchase product.

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Performance. The accomplishment of a given task measured against preset known standards of
accuracy, completeness, cost, and speed. Also can be measured in terms of Financial or non-
financial, Quality, Productivity, Profit.

Personal selling. It is where businesses use people (the "sales force") to sell the product after
meeting face-to-face with the customer. The sellers promote the product through their attitude,
appearance and specialist product knowledge. They aim to inform and encourage the customer to
buy, or at least trial the product.

Profitability. The ability of a business to earn a profit. A profit is what is left of the revenue
a business generates after it pays all expenses directly related to the generation of the revenue,
such as producing a product, and other expenses related to the conduct of the business activities.

Publicity. Gaining public visibility or awareness for a product, service or your company via the
media. It is the publicist that carries out publicity, while PR is the strategic management function
that helps an organization communicate, establishing and maintaining communication with the
public.

Serviceability. Degree to which the servicing of an item can be accomplished with the given
resources and within a specified timeframe.
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which are usually an expense such as electricity, rent and heating costs. The money that
you have saved can then be used to develop your e-commerce website and product range further.
E-commerce websites will also help you expand your product offering faster than is normally
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possible within an offline business situation. The business can be operated from anywhere. E-
commerce websites reduce any geographical restrictions you would normally face with an office
based business. You can be anywhere around the world and still successfully oversee your e-
commerce business. The essential items you need in order to oversee your e-commerce website
from anywhere are; having access to emails, the Internet and phones. Scale-ability. E-commerce
websites are very effective in allowing you to determine which products are selling successfully,
to ensure the stock levels of these products are increased. Additionally how these successful
products can be diversified to develop a larger range of products to sell through the website. This
will allow you to grow your business in terms of sales, customer base and profits. Amazon’s
online shopping website has developed successfully around scaling their product range, and
monitoring closely what is selling with customers. This has consequently allowed them to
dramatically diversify their product range into many sectors. No opening time restrictions with
ecommerce websites you are not restricting your potential customers, as they can view your
website at any time of day. This means as a business, you are maximizing your sales and profits.
How can your sales be further maximized? You can do this through a range of sales initiatives
such as special offers and online marketing initiatives. For more information on creating special
offers read our articles 20 Special offer ideas for marketing your business and How to increase
conversion rates for your special offers. Key sales strategies you could employ to increase your
online sales include upselling and cross selling. Upselling involves offering products that directly
relate to the products the customer has just selected to purchase. Products with very low cost so
the customer doesn’t really have to think about it, and they usually compliment the purchase they
have just made making it an easy buying decision. By doing this you encourage the average
basket value to go up. Cross-selling allows you to encourage people to spend more money by
buying additional products. This is usually related to the main product your customer is
purchasing. On e-commerce websites this may be included as, “You may also like”, “Wear with
this”, “Perfect match with”, “Why don’t you go pro”. These are all tactics to increase sales
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revenues for your business. More measurable than other sales approaches. You may be thinking
how do I know it will be successful, how will I measure the results? E-commerce websites are in
fact extremely measurable and trackable through systems such as Google Analytics. You can
view statistics including how many orders are processed through your site, average cart total, cart
abandonment rate and percentage of total revenue your website has achieved at regular intervals.
Less time intensive. Once your ecommerce website has been initially set up, you should not have
to invest too much time into running it. This is because the whole process for customers ordering
and making payments will all be activated through the online system. This will give you more
time to determine new products you want to sell, special offers you want to launch and to track
how successful your sales are. You will also be able to determine any trends in terms of which
products are selling most successfully. Not to be forgotten also are the increase in sales revenues
that e-commerce websites bring. The product visibility that you can gain through e-commerce
websites means that your business can encourage new customers at any time in the day. Higher
margins and better cash flow. If your business is involved and sells within the trade industry
sector, an e-commerce website will allow you to sell at higher margins. This will make the
profits you make on your products even higher. The shopping cart and payment options on these
websites also mean you are gaining a 100% payment from the customer straight away. This will
improve your cash flow, particularly when customers normally provide you with payments in
several instalments. There are also several reliable payment systems you can have for your
ecommerce website including; Paypal, Google Checkout, Sage Payment Solutions, WordPay and
more. This will ensure all your payment transactions are processed successfully, so your business
receives the payments efficiently.

Article about “Using your website to advertise your business” retrieved October 21, 2012
by April Dunca at advertising.about.com
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“You can’t hide from it. Whether you’re driving by a billboard, listening to the radio or
flipping through the TV channels, every advertisement has dot.com this and dot.com that. Even
in a lean economy, the evolution of the internet has business taking a new direction. Now
companies need a web site, even if they aren’t involved in e-commerce. But this new wave of
marketing still takes some old-school advertising.”

Article about “WebSite – Its importance for business” retrieved October 21, 2012 by Peter
Hearn at resources.bravenet.com

“In today’s time of internet popularity and globalization, a web page or website is a
dynamic tool in the market for you to both acquire and service your clients. It enables one to
make information easily available about themselves as well as the products and services they
plan to offer. Competition has never been fiercer and it has become necessary for every company
and business to fight tooth and nail for every inch of that customer share. Online presence has
lowered barriers to entry for smaller players and has provided an instant ‘Global reach at
practically zero cost’. Online a presence i.e. a website that allows you to sell your products or
services to visitors paying through their credit card.

Article about “Internet payment System” retrieved October 21, 2012 at

referencebusiness.com

“The low cost of entry has attracted hundreds of companies, large and small, to the level
playing field of cyberspace.” Paul J. Dowling, Jr. noted in his book Web Advertising and
Marketing. “On the Internet, a small, one-man operation can look as good as or better than a
large, multinational corporation. But whether it’s an individual working out of a virtual office, or
a CEO sitting in an expensive downtown office building, they’re going online for one purpose-to
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sell. And they’re leaving no stone unturned in their efforts to make it safe and easy for their
customers to buy.”

Article about “Online business advantages” retrieved October 21, 2012 by Zhenya Beck at
centauria.com

“Advantages of going online: Powerful, fast and efficient marketing and communication
tool and medium, telecommuting reduces the number of cars and car miles, very inexpensive
way to reach new markets and interact with them, Office and transportation cost savings,
unlimited possibilities for automation of your business, you can automate your order and
payment processes, your customer support tasks and more, Global presence 24/7.”

Article about “Importance of Websites in the overall marketing mix” retrieved October 21,
2012 by Derek Stockley at derekstockley.com.au

“Internet marketing is now a major, multi-billion dollar industry. Despite some concerns,
many consumers now have the skills and the confidence to transact purchases using the web. A
modern, well presented website is now expected for most business and organizations. A website
should explain the products and services offered. It should also provide background and general
contact information. A website can also allow online transactions, from simple enquiry requests,
through change of detail processing (e.g. address changes) to advanced functions such as supply
change management.

Personal Selling

(S. Jaideep, 2014) It is the best tool for two-way communication. Salesman can provide
necessary information to customer about company’s offer, and also can collect information from
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customer. Customer can actively involve with salesman to solve his doubts and objections. It is
not possible in any other methods of market promotion. Personal Attention advertising and
publicity are among mass communication tools. They do not cater individual needs. Personal
selling focuses on personal problems of customers. It is comparatively more effective and result-
oriented. Detail Demonstration except television advertisements, demonstration is not possible.
However, television demonstration is much limited. Salesman can provide a detail demonstration
and can supervise when customer is making the actual use of products. For technical products, it
has more relevance. Complementary to other Promotional Tools personal selling can support
advertising, sales promotion, and publicity. It removes the drawbacks of advertising and sales
promotion. Advertising increases awareness while personal selling reinforces the advertising
message. Similarly, it can make sales promotion tools more effective by personal guidance or
conviction. Immediate Feedback this is the only market promotion technique that provides an
immediate feedback. At the end of every call/visit, a salesman can easily judge whether the
customer is interested or indented to buy. Individual Services salesmanship offers individual
services. It can meet personal expectations of buyers. It leads to customer satisfaction. Flexibility
sales talks and presentation can be adjusted according to situation to suit individual nature,
motives, and problems. Customer Confidence by systematic sales talk and presentation, a
capable salesman can remove all doubts, quarries, objections and misunderstandings, and can
win customer’s confidence. It increases customers’ faith in company and its offers. Triple
Rewards salesmanship offers triple rewards. It benefits all parties, including customer, salesman,
and company. Customer is satisfied with products and services; salesman can achieve his targets;
and company can improve its market share and profits. Improving Image note that salesmanship
can remove bad image or misunderstanding by highlighting company’s achievements and offers.
The detailed explanation about company and its products removes all doubts and
misunderstandings. It helps in restoring company image and reputation in market.
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A. Local Literature

Online Selling

In article Business environment in the Philippines in 2012 posted on January 20, 2012
retrieve October 21, 2012 from the imapwesolutions.com, Abu Md. Rahman.

“Everyday business is becoming harder to hardest due to lot innovation and entrepreneur
creating in Philippines. Philippines is a growing country and people are adapting the social life
with technology. Technology is controlling the total business environment. Customer support is
improving every day in Philippines business. Today 1/3 of the population is using internet.
Filipinos are already trusting online transaction and deals to purchase online every day. Internet
banking is growing significantly. ATM card provider is online transaction ready since few years.

In article “internet marketing in Philippines” posted December 07, 2007 retrieve from
November 28, 2012 at articlessbase.com

“Internet marketing, also referred to as online marketing or E-marketing, is the marketing

of products or services over the internet. Because of the internet, many unique benefits on
marketing, has been added such as low cost in distributing information and media to a global
audience. Internet marketing ties together creative and technical aspects of the internet, including
design, development, advertising and sales.”
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In the article about “Advantages of starting online store” retrieve from October 21, 2012 at
pinoybisnes.com

“Consumers can easily shop from any place in the world and through many items and
categories without leaving their house. It also allows consumer to compare between a numbers of
varieties in any aspect they want. Costumer has the freedom to read reviews of the other
customers if the product is suited to their taste. They can also easily search for those hard to find
gadgets, products or items. Furthermore, the internet is available round the clock and year, so the
consumer is welcomed whenever they want to visit the Online Store.”

In the article about “Socio economic benefits of being online” retrieve from the October 21,
2012 at articlebase.com

“For many businesses, the internet has become a springboard to phenomenal success in
terms of profit. Traditional commerce may be headed to its twilight years as more and more
people are beginning to embrace the enticing allure of online shopping for goods and services.
Almost all trade transactions have online features which enable clients and consumers to satisfy
their needs without leaving the comfort of their homes.

In the article about “What are the advantages of online transaction?” posted on February
27, 2011 retrieve from October 21, 2012 by Dexter Panganiban at techathand.net

“One of the most important tools in buying online is the credit card. Although there are
other third party site that could process payment it still end up on using credit card on adding
funds to those sites.” He also include Advantages of online transaction like; “You don’t have to
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fall in line in paying; you don’t have to exert an effort in getting the product you want; it saves
time on purchasing you can do other things without living work place.”

Related Studies

A. Foreign Studies

The digital age and rise of online shopping have driven an unprecedented business model
shift for consumer product manufacturers and retailers. Many traditional consumer businesses
and new start-ups alike are moving away from models that are shop centric or geographically-
focused, to ones that are customer-centric and virtually borderless. To help inform companies
tackling this transformation, KPMG International’s recent survey of 18,430 consumers provides
a unique, comprehensive index of consumer online shopping behaviors and sentiments across
countries, products and generations.

Online shopping as a rising trend - The frequency of online purchases varies considerably by
geography. Consumers in Asia, North America and Western Europe are most likely to shop
online, while per capita online purchases in Eastern Europe and Russia, Latin America, and the
Middle East and Africa are less frequent.

A Generation X are the most active online shoppers - Among the different age groups,
Generation X consumers (born between 1966 and 1981) made more online purchases last year
than any other age group, averaging nearly 19 transactions per year. Interestingly, despite the
common belief that the upswing in online shopping is largely driven by the younger and more
’tech-savvy‘ Millennial (born between 1982 and 2001), Generation X consumers in fact made 20
percent more purchases last year than their younger counterparts.
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Stage of life and income levels are certainly primary factors driving both online and
offline shopping, and Generation X consumers, many of which are more established in their
careers and building homes and families, are likely buying more consumer goods than the
younger Millennials overall. As Millennials continue to enter the workforce and adopt new
lifestyle priorities, however, their online shopping activity is expected to surge and even far
surpass levels currently exhibited by older generations.

“There is a little Millennial in each of us. A number of Baby Boomers are starting to
understand and appreciate the technology that is out there. They’re also trying to appreciate and
experience the convenience of buying online.” — (Mark Larson, Head of Consumer and Retail,
KPMG in the US,2017).

Don’t underestimate the Baby Boomers - Compared to the digital-first millennial generation, it
is reasonable to presume that Baby Boomers (born between 1946 and 1965) are less inclined to
shop online. However, the Baby Boomers surveyed in fact shopped online just as frequently as
the Millennial. Furthermore, the Baby Boomers on average spent more per transaction than
either of the two other younger generation groups. This generation was more likely to buy
healthcare products, wine, household goods and appliances, categories which tend to have higher
price points

Men spend more online than women - While men and women shopped with about equal
frequencies, on average, the men spent more per transaction— US$220 vs. US$151 for women
—on their most recent purchase. This can largely be attributed to the fact that the male
consumers were more likely to buy items in higher priced categories such as luxury goods (55
percent of luxury transactions were by men) or electronics (72 percent of electronics transactions
were by men), while women were more likely to buy in lower-priced categories such as
cosmetics or food.
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Product category trends - The online shopping landscape is gradually changing in terms of the
types of products being bought online. Generally, consumers’ planned online purchases indicated
a year over year increase for most product categories. These results signal a higher willingness to
buy new product categories online, particularly those more traditionally sold in shops. For
example, greater options for shipping and delivery have made it easier and more common to buy
bulkier products online—including furniture, appliances and even vehicles. Meanwhile, although
‘easier to ship’ products such as books, music, electronics, accessories and apparel remain the
most popular online categories, relative growth in these segments is expected to be minimal.

In fact, we see a possible downward trend for books and music, currently the number one
online category, as Millenials purchase these items online less often than the older generations. It
will be worth watching this particular category over the next few years to see if Millennials’
preference for streaming2 vs buying media continues to put downward pressure on online sales
of books and music, since even as Millennials get older this is one area where buying habits are
unlikely to change. On the other hand, bigger items such as household goods and appliances,
furniture, home décor and sporting goods show some of the highest growth potential. According
to respondents’ planned online purchases for the coming year, online sales of household goods
and appliances are expected to increase by 3.5 percentage points, furniture and home décor by
4.3 points and sporting goods and equipment by 4.4 points. Telecom products and fragrances are
categories that are also expected to grow, by 4.5 and 2.8 percentage points respectively, as are
wine, liquor and art. In general, growth categories tend to be those which do not need trial and/or
where consumers can have relatively more faith in product quality.

“Clearly, ecommerce has been growing globally across many ‘usual suspect’ categories
like apparel, books, and music. But what we are now starting to see, and where we expect more
growth, is from categories where show rooming often occurs, such as mobile phones and laptops,
as well as furniture and decoration items. Even in the grocery retail market we see opportunities.
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Very few retailers get their online grocery model right, but when they do, it can be very
successful. Winning companies in this segment have focused on Millennials and young
professionals, where the focus on prepared fresh meals has been a growth driver.” — Willy Kruh,
Global Chair, Consumer Markets, KPMG International,2017.

According to Edward lowe “A Profit and Loss (P & L) statement measures a company’s
sales and expenses during a specified period of time. The function of a P & L statement is to total
all sources of revenue and subtract all expenses related to the revenue. It shows a company’s
financial progress during the time period being examined.

The P & L statement contains uniform categories of sales and expenses. The categories
include net sales, costs of goods sold, gross margin, selling and administrative expense (or
operating expense), and net profit. These are categories that you, too, will use when constructing
a P & L statement. Since it is a rendering of sales and expenses, the P & L statement will give
you a feel for the flows of cash into (and out of) your business.”

Specifically, business performance measurement and control systems are the formal,
information-based routines and procedures managers use to maintain or alter patterns in
organizational activities (Simmons 2000).

A typical performance measurement helps businesses in periodically setting business

goals and then providing feedback to managers on progress towards those goals. The time
horizon for these goals can typically be about a year or less for short-term goals or span several
years for long-term goals (Simmons 2000).

Since a BPM system measures performance, it is important to define what performance

is. Lebas and Euske (2002) provide a good definition of performance as “doing today what will
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lead to measured value outcomes tomorrow.” BPM then is concerned with measuring this
performance relative to some benchmark, be it a competitor’s performance or a preset target.

Measurement systems are comprised of multiple measures. A measure (or metric) is a

quantitative value that can be used for purposes of comparison (Simmons 2000). A specific
measure can be compared to itself over time, compared with a preset target or evaluated along
with other measures. Since a measure is used for the purpose of comparison, it need not represent
an absolute value. For example, in measuring customer profitability, knowing the relative
distance in profitability between two customers may be as valuable (and more easily gotten) than
knowing the absolute value for a customer’s profitability. Moreover, many BPM
systems normalize a measure into a value that promotes comparison not just with itself, but also
with other measures.

Following Simmons (2000), measures can be objective or subjective. Objective measures

can be independently measured and verified. Subjective ones cannot. Measures are also typically
classified as financial or non-financial. Financial measures are typically derived from or directly
related to chart of accounts and found in a company’s profit and loss statement or balance sheet,
such as inventory levels or cash on hand. Non-financial measures are measures not found in the
chart of accounts, such as customer satisfaction scores or product quality measures.

Measures are also leading or lagging. Lagging measures give feedback on past
performance, such as last month’s profit, and typically do not provide insight into future
performance. Leading indicators, in contrast, are designed to measure future performance, and
more often than not, future financial performance. Some leading indicators to future performance
might include customer defection rate, customer satisfaction scores or changes in consumer
confidence.
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Measures are either complete or incomplete. Complete measures capture all the relevant
attributes of achievement, whereas incomplete measures do not. Measures are also responsive or
not responsive. Individuals can influence responsive measures, whereas non-responsive
measures are outside the influence or control of an individual (such as consumer confidence).
Measures may be related to inputs into a process, feedback on the performance of a process itself
or they may be related to the outcomes or outputs from the process. Measures may be related to
human performance, process performance or market conditions.

Some, but not all, measures are directly related to the firm’s strategy and are critical for
its successful execution of its strategy. These are called critical or key performance indicators.
Finally, measures can refer to tangible things, often recorded in the chart of accounts, such as
inventory levels, accounts receivable balances, employee headcount, or can refer to intangibles
such as level of skill or knowledge, creativity and innovation.

In summary, below is a listing of attributes that can be useful in examining, selecting,

designing and using measures:

 Objective / subjective
 Financial / non-financial
 Lagging / leading
 Complete / incomplete
 Responsive / non-responsive
 Inputs / process / output
 Critical / non-critical
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 Tangible / intangible

When discussing performance measurement, most practitioners (and software vendors)

refer to the type of measurement that helps companies monitor its current and past state.
Thresholds, both low and high, for key performance indicators (KPIs) are set and managed by
exception. When data begins to move outside the threshold limits, the performance measurement
system can alert management, who then attempt to diagnose the problem and address its causes.
This type of measurement is referred to as diagnostic control systems (Simmons 2000). While
this type of measurement provides management with basic control over the firm and an “auto-
pilot capability that can keep the firm on target with its goals, it is frequently insufficient for
success.

Interactive control systems provide additional control capabilities to help the firm deal with
strategic uncertainties. According to Simmons (200), interactive control systems “are the formal
information systems that managers use to personally involve themselves in the decision activities
of subordinates. Interactive control systems help managers integrate new data and learning into
the decision-making process. Diagnostic and interactive control systems are not disjoint. In fact,
an important synergy may exist between the two as multiple diagnostic control systems serve as
a basis for dialog between levels in the firm (de Hass & Kleingeld 1999). This strategic dialog
can aid in managers questioning the validity of its control system, constituting double-loop
learning which challenges controlling assumptions or variables for the process, the business unit
or the firm.

BPM systems need to provide insight into different units or levels of analysis. Performance
can be ascribed to corporations, business units, support or functional units, teams and
workgroups and individuals. One key benefit of BPM systems lies in their ability to help align
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these different levels of analysis in the firm. Many corporations consist of several business units
or divisions that compete in different markets with differing strategies. A corporate-wide BPM
system can help articulate the theory of the firm (why different business units exist within the
corporation) and improve overall performance by exploiting synergies between the business units
(Kaplan & Norton 2001). At the lowest level of analysis lies measurement of human
performance, for which the literature and examples are rich and long. In between the business
unit and the individual lie other layers, such as the functional or service group, workgroup or
team and the business activity. BPM systems are often designed to be a vehicle for strategic
dialog within the firms. Therefore, performance metrics and scorecards scattered horizontally
and vertically across a corporation, need to be coherent so that the conversations between people
about the strategy is consistent and all the different measurement units contribute to the
performance of the corporation overall (de Haas & Kleingeld 1999). BPM systems can help
provide this firm-wide coherency.

Why Measure Business Performance?

Business performance measurement has a variety of uses. Bititci, Carrie and Turner (2002) list
the following reasons companies measure business performance:
 To monitor and control
 To drive improvement
 To maximize the effectiveness of the improvement effort
 To achieve alignment with organizational goals and objectives
 To reward and to discipline

Simmons (2000) looks at business performance measurement as a tool to balance five major
tensions within a firm:
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1. Balancing profit, growth and control

2. Balancing short term results against long-term capabilities and growth opportunities
3. Balancing performance expectations of different constituencies
4. Balancing opportunities and attention
5. Balancing the motives of human behaviour

Looking at the firm as a complex organism seeking to survive or thrive in its competitive
environment, performance measurement systems serve as a key contributor to the perceptual and
coordination/control capabilities of the firm. Firms use BPM systems to help monitor and control
specific activities; to predict future internal and external states; to monitor state and behavior
relative to its goals; to make decisions within needed time frames; and to alter the firm’s overall
orientation and/or behaviour.

“Analysis of E-service Quality through Online Shopping” by Mohammad Al- Nasser,

Rabiul Islam, Irwan Shah Zainal Abidin, Muhammad Azam and Akhiles Chandra
Prabhakar.
According to Asubonteng et al. (1996), e-service quality is the difference between customers’
expectations for service performance priorities the service encounter and their perceptions of the
service received while Bitner et al. (1990) defined it as the consumers’ overall impression of the
relative inferiority/superiority of the organization and its services. These definitions vary from
person to person but their essence is similar (Khalil, 2011). Ojo (2010) stated that the definition
of service quality differs only in their wording but they generally relate to the determination of
whether perceived service delivery leads to the meeting, exceeding, or failure to satisfy customer
expectations.
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Service quality may be defined as the difference between customers' perceptions of the
service received and their expectations about service performance prior to the service offering
(Asubonteng et al., 1996). If service performance does not meet expectations, people will think
that the service quality low. However, when performance goes over expectations, the perception
of the service quality is higher (Connolly, 2007). Therefore, customers' expectations are crucial
in evaluating service quality. In addition, Asubonteng et al. (1996) found that when service
quality increases, intentions to use the service or product and satisfaction increase.
Most practitioners as well as researchers use web service quality and e-service quality
synonymously. For instance, Zeithaml (2002) defined e-service quality as the level to which a
website uses effective and efficient shopping, purchasing and delivery of goods and services
while Zhang and Prybutok (2005) utilized the same concept to describe quality of website
service. Similarly, Santos (2003) defined e-service quality as consumer overall opinions and
evaluation regarding the excellent e-service delivery in online market while Collier and
Bienstock (2006) provided a description of e-service quality as the user’s perceptions of the
result of the service delivery as well as their perceptions of service recover in case of service
failures. Trust in online retailer was positively associated with the attitude of consumers to online
shopping. Therefore, marketers and managers should take into close consideration the
requirements of trust development in online retailing. Finally, trust based on e-service quality is
considered as the most suitable environment for developing favorable consumer attitude towards
online shopping.
B. Local Studies

Online Selling
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“INFOGRAPHIC: Fast facts on online shopping in PH”retrieved from May 31, 2016 by
Therese
According to a UBS Securities report, the ASEAN e-commerce market is $500 million to
$1 billion in size or 0.2% of total retail sales. The opportunity set is as high as $35 billion by
2020. This means “business is thriving,” with the Philippines on track to becoming one of the
top performers in two to 3 years. As such, Balci is optimistic that between 2015 and 2016,
there is going to be an inflection point. “More and more people will buy (online) in the
Philippines,” shared Balci. He was quick to add, though, that this will depend largely on the
quality of customer service his company will provide over that period. This point he could
not overemphasize: “This business will not succeed without the best service.” Since its
inception in April 2012, Lazada has set up an in-house customer management crew, the cash-
on-delivery system, and its own logistics unit to address several challenges in the archipelago
such as low credit card penetration and inefficient supply chains. Now it has an almost equal
penetration between the urban (Metro Manila, Metro Cebu) and rural areas. The Rocket
Internet-backed group continues every day to build critical mass for the market. Online retail
shares 0.3% of nationwide retail sales. The room for growth is massive, reflecting
movements in the region. As Filipino netizens become more and more attuned to the use of
mobile devices and remain one of the top active users on Facebook, Lazada is ready to take
e-commerce to another level: mobile and social commerce.

Purchasing a fake item online remains a discouraging possibility in the country. Add this to
the hard-to-please behavior of Filipino buyers. As a retailer, it performs a quality check on its
own inventory. As a marketplace, it deals with it this way: “Our merchants upload their products
online. But what we do is, if we catch it (the fake item) before it goes online, we give a warning
to the merchant; the second time, we take the merchant offline even if the merchant is our top
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merchant,” said Balci. “No excuses,” Balci said. “Our business’ future depends on customer
feedback,"

A research about “Philippines E-Commerce and Online Advertising Market Research

Report” retrieved from November 5, 2014 by KenResearch.
The Philippines e-commerce market has a tremendous potential in terms of future growth
because of a large number of people becoming adaptive towards online shopping trends with the
help of rising internet and social media penetration rate in the country. The e-commerce market
in the Philippines is projected to reach USD ~ million by 2018 from merely USD ~ million in the
year 2013 and thus is expected to grow at a stupendous CAGR of 101.4% during 2013-2018. The
inconsistencies in the internet services that are being provided across the country would be taken
care of in the coming years leading to more people getting internet access. The payment security
issues would be given more consideration so as people have more confidence in the e- commerce
services and feel secure transacting through the internet.
Online retail has been experiencing a remarkable growth in the Philippines majorly due to the
success of discount driven online sites. The different online retail sites such as Lazada, CashCash
Pinoy, Groupon and Zalora have brought a new zeal and excitement in the e-commerce space in
the Philippines by building trust and loyalty among the customers and offering heavy discounts.
The online retail market in the country is projected to grow at a stupendous rate of 189.2%
during the period 2013-2018. The market would grow in terms of total value of transactions to
USD ~ million by the year 2018.
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Synthesis of the Review of Related Literature and Studies

As cited in the review related literature and studies, online shopping is increasing year on
year and is being seen as a convenient method to purchase products, where you can also buy at
any time in the day. Additionally e-commerce websites allow you to employ a range of
marketing and sales techniques to give people that extra reason to stay on your website and buy
your products. Lower set up and running costs than an offline businesses.
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According to S. Jaideep, personal selling is the best tool for two-way communication.
Salesman can provide necessary information to customer about company’s offer, and also can
collect information from customer. Customer can actively involve with salesman to solve his
doubts and objections. It is not possible in any other methods of market promotion. Personal
Attention advertising and publicity are .among mass communication tools. Personal selling
focuses on personal problems of customers. It is comparatively more effective and result-
oriented.

Specifically, business performance measurement and control systems are the formal,
information-based routines and procedures managers use to maintain or alter patterns in
organizational activities (Simmons 2000).

Our overall view about the study is that both online selling and personal selling have their
own advantages as well as disadvantages as a business transaction. It can be a great tool for the
sellers and entrepreneurs to start up a business and increase their income by involving
themselves to either of the two business transaction. Furthermore, this study will provide a
deeper and complex comparative analysis between online selling and personal selling.
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Respondents of the Study

The study consists of the online and personal sellers in line with clothing in the City of Cabuyao,
Laguna. These respondents were chosen as they sell personally and through online.

Sources of Data
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Barangay No. of owner Online Selling Personal Selling

Respondents Respondents
Poblacion Uno 47 31 31
Banay-banay 7 5 5
Pulo 23 15 15
San Isidro 18 12 12
Banlic 13 9 9
Mamatid 42 28 28
Total 150 100 100

Statistical Techniques

The Following are the statistical techniques that were used throughout the study:

1. Frequency and Percentage Distribution

The researchers used frequency and percentage distribution in presenting the
demographic profile of the respondents.
Where:
P= the percentage value
f= the number of frequency
interval in the data
n= number of data
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2. Weighted Mean ()
Weighted mean was used to measure the central tendencies among the
respondents in the indicators of the level of performance in the assessment of the
respondents. The formula is:

Where:

= weighted mean

= summation of response
f= frequency of response
x= weighted score
N= total number of response

3. T-test
A t-test is an analysis of two population’s means through the use of statistical
examination; a t-test with two samples is commonly used with small sample sizes, testing
the difference between the samples when theWhere:
variances of two normal distributions are
not known = mean of sample 1

= mean of sample 2
= number of subjects in sample 1

= number of subjects in sample 2

= variance of sample 1

= variance of sample 2
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Research Instruments
The researcher’s data gathering in the study will be taken from the result of the survey
questionnaire which will be conducted in the City of Cabuyao, Laguna. The researchers will be
the one to administer the documentary analysis of the study. The questionnaire will be consult to
their adviser and statistician before it will present and conduct among respondents.

Evaluation and Scoring

In interpretation of the data that will be gathered, we will use the four-point Likert
Scale, which will utilize the following measurement of the tabulate data as follows:

RANGE VERBAL INTERPRETATION

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5 Excellent
4 Very Good
3 Good
2 Average
1 Poor

Survey Questionnaire
Online Selling and Personal Selling: A Comparative Analysis
Greetings!
We the third year student of Pamantasan Ng Cabuyao taking Bachelor of Science in
Business Administration Major in Marketing Management, are conducting this survey in partial
fulfilment for our course requirement. Rest assured that all data that will be gathered will only be
used for the intended purposes of the study. Thank you!
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I. Respondent profile
Name (Optional) :
Gender :
Age :
Civil Status :
Business Type :

Business Profile
Name of the Business :
Years in the Industry :
Product :

II. Read the following and check the stage if the space under the scale that you feel
most accurately describes your reaction to the statement. Please be honest. Use
the following descriptive scales above:

Excellent – 5 Very Good – 4 Good – 3 Average – 2 Poor – 1

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1. Mark-up percentage

How much is your mark-up percentage in pricing your product?

 10%
 20%
 30%
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 40%
 50%
 Others please specify:
_________________

2. Cost Efficiency

How much is your monthly expense?

 P3,000 to P4,000
 P5,000 to P6,000
 P7,000 to P8,000
 P9,000 to P10,000
 Others please specify:
_________________

3. Profitability

How much do you earn monthly?

 P5,000 to P10,000
 P11,000 to P15,000
 P16,000 to 20,000
 P21,000 to P25,000
 Others please specify:
_________________

4. How much is your start-up capital?

 P5,000.00 - P10,000.00
 P11,000.00 - P20,000.00
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 P21,000.00 - P30,000.00
 P31,000.00 - P40,000.00
 P41,000.00 – P50,000.00
 Others please specify:
_________________