Marketing strategies of selected KTV Bar and Restaurant in Manila:

An Assessment

Alyson Ray D. Dela RosaRayson C. Tumabcao

Ame T. Lagahuya

CHAPTER 1

IntroductionNight club, pub or KTV bar industry is believed to occupy as one of the

most places where people went in night. There are a lot of ways to satisfy the needs of man, we think that happenings, enjoyment and even food are the most essential ones; therefore we decided to put up for the public.

We know that putting up a night club or KTV bar is not an easy job to be done but serving and satisfying the drives and needs of men is the specialty of the proponents’ course, so we come up with this ideas, the first thing we could decide is to know the “Marketing Strategies of Selected Night Clubs in Manila”, which is the title of the research study we are going to discuss on.

This aims to determine what marketing strategies of night clubs in Manila are using. In this study will reveal the importance of the company’s and owner’s marketing plan, their techniques, business styles and their promoting services. Differences will determine how each night clubs delivered their services to the industry in various marketing strategies.

Background of the StudyTo better understand the role of KTV bars in the life of modern people

throughout the world, one should consider the early developments and subsequent growth of the industry, how from its inception in the dim and distant pass, it now provides millions of people with meals, liquor, entertainment, and service away from home. How it is presently employs workers. Sector of the retail trade; how it has changed popular entertainment habits throughout the introduction of varieties of enjoyment.

Karaoke (Japanese: from karano, "empty" or "void", and ōkesutora, "orchestra") is a form of entertainment in which an amateur singer or singers sing along with recorded music on microphone. The music is typically of a well-known song in which the voice of the original singer is absent or reduced in volume. Lyrics are usually also displayed, sometimes including color changes synchronized with the music, on music video to guide the sing-along.

Karaoke has been a popular form of entertainment beginning first in Japan, then the rest of East Asia, since at least the 1980s, and has since become the most popular form of entertainment in North America. It is now considered to be the most enjoyed thing ever!! Karaoke engenders quite a bit of culture specific to its enthusiasts, and this culture, unsurprisingly, varies from country to country.http://www.wikiepedia.com

Word origin

The Japanese word stems from the words kara which is short for karano, meaning "empty", and oke which is short for ōkesutora, meaning "orchestra". The words together make a contraction literally meaning "empty orchestra".

This term used to be slang for media where pre-recorded music substitutes for a live performance, thus it is written in katakana. The term karaoke can be interpreted as "virtual orchestra" because one can specify a key to the music and start singing along without the presence of a live band or orchestra. In the United States, the word is often pronounced as "karioki". (These pronunciations are in IPA.) History

It has been common to provide musical entertainment at a dinner or a party in Japan, as in the rest of the world, for a long time. This tradition appeared in the earliest Japanese mythology. For a long time, singing and dancing remained one of the few adult entertainments in rural areas. Noh was initially played at a tea party and guests were welcomed to join in for a cheer or a shout of praise. Dancing and singing was also a part of a samurai's education. It was expected that every samurai have a dance or a song they could perform. During the Taisho period, Utagoe Kissa, (literally song coffee shop), became popular and customers sung to a live performance of a music band.http://www.wikiepedia.com

The karaoke industry started in Japan in the early 1970s when singer Daisuke Inoue (Inoue Daisuke) was asked by frequent guests in the Utagoe Kissa, where he performed, to provide a recording of his performance so that they could sing along on a company-sponsored vacation. Realizing the potential for the market, Inoue made a tape recorder that played a song for a 100-yen coin. This was the first karaoke machine. Instead of selling karaoke machines, he leased them out, so that stores did not have to buy new songs on their own. Originally it was considered a fad which was lacking the "live atmosphere" of a real performance. It was also regarded as somewhat expensive since 100 yen in the 1970s was the price of two typical lunches. However, it caught on as a popular entertainment. Karaoke machines were initially placed in restaurants or hotel rooms; soon, new businesses called Karaoke Box with compartmented rooms became popular. (See below "Public Places for Karaoke" and "Terms of Karaoke" for a description of karaoke boxes.) In 2004, Daisuke Inoue was awarded the tongue-in-cheek Ig Nobel Peace Prize for inventing karaoke, "thereby providing an entirely new way for people to learn to tolerate each other."

Early karaoke machines used cassette tapes but technological advances replaced this with CDs, VCDs, laserdiscs and, currently, DVDs. In 1992, Taito introduced the X2000 that fetched music via a dial-up telephone network. Its repertoire of music and graphics was limited, but the advantage of continuous updates and the smaller machine size saw it gradually replace traditional machines. http://www.wikiepedia.com

Karaoke machines connected via fiber-optic links to provide instant high-quality music and video are becoming increasingly popular.

Karaoke soon spread to the rest of Asia and then to the United States in the 1990s. Facilities such as karaoke bars or "KTV boxes" provided the venue, equipment and software for amateur singers to entertain each other.

Its popularity has spread rapidly to the United States, Canada and other Western countries. Some people still regard it as "hokey" and simply a method for the intoxicated to embarrass themselves, but as the novelty has worn off and the available selection of music has exploded, more and more people within the industry see it as a very profitable form of lounge and nightclub entertainment. It is not uncommon for some bars to have karaoke performances seven nights a week, commonly with much more high-end sound equipment than the small, standalone machines noted above. Dance floors and lighting effects are also becoming common sights in karaoke bars. Lyrics are often displayed on multiple TV sets around the bar, including big screens. Technology

A basic karaoke machine consists of audio input, a means of altering the pitch of the music (not the singer) and an audio output. Some low-end machines attempt to provide vocal suppression so that one can feed regular songs into the machine and http://www.wikiepedia.com

suppress the voice of the original singer, however this is not very effective (see below). Most common machines are audio mixers with microphone input built-in with CD+G, Video CD, Laser Disc, or DVD players. CD+G players use a special track called subcode to encode the lyrics and pictures displayed on the screen, while the other formats natively display both audio and video. In some countries, karaoke with video lyrics display capabilities is called KTV.

Most karaoke machines have technology that electronically changes the pitch of music so that amateur singers can sing along to any music source by choosing a key that is appropriate for their vocal range, while maintaining the original tempo of the song. (There were some very old systems that used cassettes, and these changed the pitch by altering playback speed, but none are still on the market, and their commercial use is virtually nonexistent.) Public places for karaoke

In Asia, a Karaoke box (also called KTV or, in Korea, Noraebang) is the most popular type of karaoke venue. A karaoke box is a small or medium-sized room containing karaoke equipment for a group of friends to rent by timed increments, providing for a more intimate and less public atmosphere. Generally, entire businesses http://www.wikiepedia.com

provide karaoke as their primary function, although karaoke machines are sometimes included in hotel or other business facilities. "Going to karaoke" is considered a first step in nanpa.

A karaoke bar / karaoke restaurant / karaoke club / karaoke lounge is simply a bar or restaurant with karaoke equipment, so that people can sing publicly. This is the most common arrangement in North America and Europe. Many establishments offer karaoke on a weekly schedule, while some have shows every night. Such establishments commonly invest more in both equipment and song discs, and are often extremely popular, with an hour or more wait between a singer's opportunities to take the stage (called the 'rotation'). East Asian, North American and other Western karaoke arrangements are usually add-ons to an existing bar or social lounge. Most of these establishments allow patrons to sing for free, with the expectation that sufficient revenue will be made selling food and drink to the singers. Less commonly, the patron wishing to sing must pay a small fee for each song they sing.

In some traditional Chinese restaurants, there are so-called "mahjong-karaoke rooms" where the elderly can play mahjong and teenagers can enjoy karaoke. The result is fewer complaints about boredom but more noise.

http://www.wikiepedia.com

Statement of the Problem General Problem

The main purpose of the study is to assess the problems encountered in Marketing Strategies of Selected Night Clubs in ManilaSpecific Problem

Specifically it sought to answer the following sub-problems1. What is the Demographic profile of the respondents in terms of the following variables:1.1 Age1.2 Gender1.3 Form night club1.4 Capitalization1.5 Management status1.6 Type of business2. How do the respondents rate the problem in Marketing Strategies of Selected Night Clubs in Manila in terms of:2.1 Internal Environment2.1.1 Performers are getting old2.1.2 Performers staying in the club has been pregnant2.1.3 Performers gave birth to a child and also stays in the club

2.1.4 Children are seeing what their mother is doing2.1.5 Peace and order inside the club is not always being handled2.1.6 Fights happening inside the club2.2 External Environment2.2.1 Law enforcers are always conducting an inspection and raids2.2.2 Law making body will enforce new rules for night clubs2.2.3 Stricter policy for night clubs2.2.4 Anew and much cheaper night clubs coming into competition2.2.5 Taken-out performers are being abused by customers3. Is there any significant difference on how the respondents rate the Marketing Strategies of Selected Night Clubs in Manila when graphed according to their profile4. What alternative course of action is necessary to address the problem encountered in the Marketing Strategies of Selected Night Clubs in Manila

Conceptual frameworkThis study revolves around the task of finding the right combination of

the different elements of marketing mix.Marketing consist of a set of controllable marketing variables that the

firm bends to produce the response it wants in the target market. These four variables are the four P’s of marketing strategies, which are product, price, place, and promotions. All of these influence the customer’s responses and decisions and are used by the companies in mapping an effective and successful marketing strategy.

Marketing strategy is a unified plan and the central focus of the marketing department. This entails the decision on what is to be offered and how. It embraces different components of imperfect competition in their search for extra ordinary profits.

Product is the heart of the marketing mix. It refers to the physical goods and intangibles. It is something that has value and utility and is bought because of the different benefits it could deliver to the customer.

Place is the choice of location which has much to do with success of the business operation. It also stands for company activities that make the product or service available to customers. In addition to the site factor, the atmospheric characteristic of the place should be considered. Likewise the principles of design and layout of the night club include the size, shape, style and decoration of the place, and the location of the facilities and equipment.

In service type of business, the establishments of branches in different locations are practiced to reach its customers.

Price is the amount of money that a customer pays to avail of a certain product. It is expressed in terms of peso and centavos. It is the only element of the mix that generates revenue. Businesses can establish prices of their products at either higher or lower than, or the same as of the competitors. Pricing can be a key competitive factor in the industry and it reflects the quality of goods carried and services offered. Pricing objectives may vary depending on the company. Sometimes, special consideration can influence the general level of price.

Promotions encompass all the ways a business or firms communicates the merits of their product or service to the market. Generally, a business can adopt any kind of communication approach, either mass communication or personal communication. Communication approach includes advertising, sales promotions and publicity while personal communication approach includes personal selling.

Through this study, it is hoped that ideas and concepts may be discovered by which owners/operators of night clubs may enhance or improve their marketing strategies and operations so that the best interest of the buying public and the business owners themselves may be better served.

Conceptual Framework showing the Aspects that Influence Marketing Strategies

Significance of the StudyThe importance of the study will probably used for the following

research study, findings and results, and the respondents’ response, such as:

1. As an individual researcher: This study is important to find out the effective and efficient marketing strategies that night clubs uses in Manila

2. For the management: To be used as a part of the respondents of the study in order to obtain data and information concerning management styles and handling of customers. They will answer a questionnaire sheet and undergo an interview to determine their competitiveness and effectiveness.

3. For the society: To get opinions and suggestions if any, what is the effect of night clubs to their lives and also what does any other things that night clubs needs to change and undergo.

Scope and Limitations of the StudyThis thesis report will deal on the scope and concepts of night club

industry and its related review of related literatures and studies. The study is limited only on discussions pertaining to the marketing strategies of selected night clubs in Manila. It also includes factual information gathered from data collections among selected respondents which involves management administrators and customers and also law enforcers who inspects the night clubs in Manila being interviewed. Findings will be discussed on the last chapter of this thesis report.

Definition of termsParokyano- customers who regularly goes into a night clubBouncer- the security and peace administrator of a night clubBugaw- a person who employs women into a club and does the talking for special serviceGuest relation officer (GRO)- women who worked on a night club as performers and handles the customersTable- a term called when a customer picks a GRO and pays to sit and chat withVIP room- a special room where in there is no another customer other than the guest and their chosen GROTake-out- a term used when a customer decides to take the GRO with him and paying the bugawSpecial service- is a term used when a customer asks a GRO to mingle with him, do something dirty and him the best satisfaction that will get him to heavenTip- is giving a GRO and even a waiter extra money for satisfactory serviceHappy hour- when a night club gives of discounts and does do eventsSpecial night- a chosen night of a specific day wherein the performers are doing a special performance that is extra ordinary and sometimes heart pounding and erecting for men

CHAPTER 2

Related Literature and Studies Local Studies

According to Anna Sophia B. Mirasol, the market penetration strategy is highly attractive for Glassworks Industries Inc., a family-owned enterprise, was founded in December 1993 with the primary focus of manufacturing safety-tempered glass for markets primarily concerned with automobile and architectural applications. Modest manufacturing operations began in 1995 with one tempering furnace, followed shortly thereafter by the inauguration of additional processing equipment and, eventually, two more tempering furnaces in line with the strategic objective of ensuring the organization was geared up to maximize production for the then-ongoing construction boom as well as burgeoning growth in the transportation sector. More specifically, the company chose to establish niches for itself in both the automotive and architectural glass markets for automotive replacement and residential to low-rise architectural applications, respectively. As the company has, for the several years, channeled an overwhelming majority of its resources towards achieving technological superiority by investing huge amounts of capital in state-of-the art equipment while simultaneously neglecting to maximize the resulting benefits of the program by failing to ensure commensurate focus on increasing the strength of its marketing efforts.

Consequently, the company needs to intensify its marketing operations in the Architectural market and should also increase its marketing efforts for its automotive replacement glass application. The successful implementation of this strategy will ensure an increase market share in the Philippines.Also the implementation of product development strategy is highly attractive because it will enhance the company’s marketing effort

Misato a semi-fine dining Japanese restaurant that is situated at the forefront of the bustling and booming Metro Commercial Complex. This location of Misato is at the heart of Ortigas Business Center in Pasig, Metro Manila. Misato was opened on July 29, 2004 by six incorporators- a Filipino And five Filipino-Chinese Businessmen – under the name of Januki Pacific Group Asia, Inc that is incorporated in March 2004. According to Leslielyn L. Ngo the strategies must be consistent with the strategic objectives and the departmental programs. They must be consistent with the company’s mission and vision statements and must work towards their attainment. The results of the strategies must be measured against the projected financial goals and targets. Adjustments must be made to action plans should the strategies miss the expected financial results.

Kultura Store, Inc is a new concept store of SM Group of Companies that caters not only locals but to balikbayans and tourist as well. As the name suggest their focus is to provide the best of Filipino products here in the Philippines and position themselves as the top affordable retail store in sevicing these particular market. Kultura Store will be located to all selected SM Mall branches and SM Department Stores nationwide. The company has centralized itself directly to those branches that have a niche to their target market that will be critical to the success and its long-term growth. According to Nina Yabut, the company must pursue on product development strategy that requires aggressive sales and marketing campaign. The company will vigilantly monitor its marketing channels for the physical distribution of its products according to the specific condition and culture of the market.

East-West Seed Co., Inc. (EWPH) is the leading vegetable seed company in the Philippines the company is involved in developing, marketing and selling of high quality vegetable and flowering seeds as well as farm-ready seedlings and some horticulture supplies. At the present, EWPH holds the no. 1 position in the vegetable seed industry in terms of market share among the six key players competing in the Philippines. According to Rowena Buan-Yost, market penetration is the most attractive strategy followed by product development and market development respectively. Market penetration should relatively be given more focus for a three-year strategy. However, product development playing as the second best could still be employed as another strategy specifically to continously reinvent with different vegetable seed varieties and develop new products capitalizing a very strong R&D.

These two strategies could be used in an integrated manner to create synergy in attaining higher sales, greater profit and completely dominating the market shares for the company

Heidi Ann M. del Rosario studied D’ Original Pares Mami House restaurant in the Philippines particularly its flagship branch in Espaňa, Manila. D’ Original Mami Pares House has been in the restaurant industry for the past 18 years. The company’s main branch was put up in May 1989. It prides itself as the pioneer among the Pares Mami House restaurants in the country. In fact to protect its interest, the company filed the brand name “Pares Mami House” with Department of Trade and Industry. According to Heidi Ann M. del Rosario, the recommended strategy for D’ Original Pares Mami House has been limited to two choices: Related Diversification and Market Penetration. However related diversification is deemed as the most fitting strategy because a Market Penetration is not applicable to a company with saturated market. In order to achieve the targeted gross sales, D’ Original Pares Mami House will diversify its products and adding services to augment the sales of its main line. The primary thrust of this strategy is to strongly entrench the new products into the customers’ consciousness through effective utilization of its corporate brand name.

Jose Mari S. Saulo studied Philippine Aslam Corporation. Philippine Aslam Corporation is a business that deals with the industrial manufacturing of vinegar. It produces vinegar from denatured alcohol with a 10% level of acidity (table consumption is at 4%) and sells the product to companies for dilution, repacking and distribution. The company was founded by Mr. Manuel Cokehyeng in 1984. Operations began with a single machine and tank for fermentation. An Acetator, the machine and tank used for fermentation, was purchased and started production with a capacity of 3,000 liters of vinegar per day or some 1.08 Mn liters per year, yielding the prescribed 10% acidity. According to Saulo, Philippine Aslam Corporation must engage in (market development) prioritized strategies in the following orderEx-Plan: Participate in the government’s export development programEntre-Plan: Employ a business entrepreneurship program on vinegar for retail distributionSub-Plan: Achieve contract sales to suppliers using a tiered pricing strategy in the Philippine government’s export development program, PAC should take the lead by entering into export of concentrates to the world. On the domestic front, PAC should explore market development channel through retail sales. Lastly, PAC must maintain a segment of bulk sales contract to provide for the vinegar needs of such companies which also have a popular reputation.

Foreign LiteratureROLE OF TRADE IN CLASSICAL SOCIETIES

According to Jennifer Ladon, Patrick Whelan long distance trade expanded greatly during the classical period, allowing for the movement of and ideas. There were a few factors: the than empire secured the trade routes through Central Asia; the Mauryan Empire had declined in India, but regional states were able to provide the necessary stability and security; and the Roman kept the Mediterranean Sea safe for trade and travel. This stability and security allowed for long distance trade to drive.Indian Ocean

According to Jennifer Ladon, Patrick Whelan the Indian Ocean is sometimes referred to as the sea lanes of the Silk Roads. This ocean trade went from Guangzhou in southern China through the South China Sea, through the islands of Southeast Asia, India, the Arabian Sea, and the Persian Gulf. The principal players in the trade were Malay and Indian sailors. Religion and culture also spread across the seas. Some merchants spread Buddhism to Southeast Asia, while others promoted the Hindu cults Shiva and Vishnu. Mediterranean Sea

According to Jennifer Ladon, Patrick Whelan (2005) the Mediterranean Sea is often referred to as the Roman Lake, because the Roman Empire surrounded the sea. Sea trade flowed from Syria to Spain to North Africa. The Romans kept their lake safe and free from pirates, which allowed the trade to thrive and grow, and transport goods from one part of the expansive empire to the other.

According to Rajiv, Quelch, Rangan (2005) Market segmentation is a logical next step to customer analysis. It consists of clustering the firms’ potential consumers in groups (called market segments) that clearly differ from each other but show a great deal of homogeneity within the group.

According to Rajiv, Quelch, Rangan target market is the next logical step following segmentation. Once the firm understands the structure of consumer demand it has to decide which segments it wants to serve and how.According to Rajiv, Quelch, Rangan the positioning statement is primarily directed to potential customers and has a guiding role in defining every element of the marketing mix. It provides the organizing force between the marketing mix elements to ensure synergy among them.

According to Ferrell, Hartline (2008) the relationship between price and other elements of the marketing program dictates that pricing decisions cannot be made in isolation. In fact, price change may result in minor modifications to the product, distribution, or promotion strategies. As we have discussed, it is not so much the actual price being charged that influences buying decisions as the way that members of the target market perceive the price. This reality reminds us that many of the strategic issues involved in pricing have close ties with costumer psychology and information processing: what costumers think about prices is what those prices are to them.

According to Stein, Macaaron (2005) preparatory research helps you define your target audience and the competition in the market place. Is there a need for your service or product? Is there an audience for it? Is that audience already well served? Where is room for improvement? Compare what already exists. Which products or aspects of the product are most successful? How much are consumers currently prepared to spend? This is where you need to delve deeply into the minds of your prospective customers to anticipate how you can engage them. This is where your marketing conversation begins.

According to Levy (2008) a marketing plan is a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of 4Ps, action programs, and projected or pro-forma income (and other financial) statements. The three major phases of the strategic planning process are planning, implementation, and control.

According to Smith, Albaum (2005) marketing research is a systematic search for, and analysis of, information. Careful planning throughout all stages of the research is a necessity. Researchers must start with a clear and concise statement of the problem to be researched. Good research practice requires that the information sought, the methods used to collect the information, and the techniques employed to analyze the information be systematically and carefully laid out in advance.

According to Britten, Tom Just as operating the same old way won’t work in today’s marketplace, neither will selling the same old way.

More aggressive competition in marketplace with a dwindling number of potential locations necessitates a more deliberate, systematic approach to growth. Being good at what you do is no longer good enough. Creative, hard hitting sales and marketing strategies must be in place if you are to have any chance of growing your business on a sustained basis. “Selling on purpose” is a big job; it requires a serious commitment of time and effort over a long period of time.

According to Gupta, Lehmay, (2005) importance of customers are the lifeblood of any organization. Like many clichés, this one happens to be true.

Local LiteratureAccording to Roman D. Leayo Corpuz the factors of production, our economic

resources are also known as factors of production or inputs. There are five major factors of production which are utilized in our economy. These are land, labor, capital, entrepreneur, and foreign exchange.1. Land – These resources consist of free gifts of nature which includes all natural resources above, on, and below the ground such as soil, rivers, lakes, oceans, forests, mountains, mineral resources and climate. Land is considered economic resources because it has a price attached to it. One cannot utilize this natural resource without paying for it usually in the form of rent or lease.2. Labor – This is also termed as human resources. Labor refers to all human effort, be it mental or physical, that help to produce want satisfying goods and services. This applies not only to workers, farmers or laborers, but also to professionals like accountants, economists or scientists. Labor is an indispensable factor in the production of goods and services. In return, he earns an income in the form of wages and/or salaries.3. Capital – It is a finished product which is used to produce goods. It consist of all man-made aids to further the production process such as tool, machinery and buildings. Capital also serves as an investment. Income derived from capital is interest.Entrepreneur – This is French word meaning enterpriser. An entrepreneur is the organizer and coordination of the other factors of production: land, labor, and capital. An entrepreneur is one who is engaged in economic undertakings and provides society with goods and services it needs. He utilizes his initiative, talent and resourcefulness in

the creation of economic goods. He is able to compensate himself through the acquisition of profits.5. Foreign Exchange – This refers to the dollar and dollar reserves that the economy has.

According to Roman D. Leano Jr, Corpuz types of economic system there are four commonly used economic systems. They vary according to the types of resources they might give to certain economic issues such us what goods to produce and in what quantities, the process by which the goods are produced and how these are to be distributed. These are:1. Traditional Economy – it is also known as the subsistence economy. In this type of economy, people produce goods and services for their own consumption

. Decision are based on customs and traditions and the production techniques are outmoded and sometimes obsolete.2. Command Economy – Under this system, the government takes hold of the economy of the State. Policy formulation, economic planning and decision- making are done by the government. It dictates on what to produce, how to produce and for whom to produce. The system works based on the interest of the country and not on the individual. In this case, the customer could not choose the goods and services he wanted. The government answers the major economic questions through its ownership of resources and its power to enforce decision.3. Market System – in a capitalistic system, business enterprise are owned and controlled by private individuals. One of the major feature of this system is “free enterprise” meaning that any individual can engage in any enterprise which he thinks will yield him a profit in competition with other businesses.4. Mixed Economy – this is a system which is a mixture of the different types of economy. The private capitalist and the government play a major role in solving the basis problem of the economy for the benefits of the consumers.