Part II-Theory Base & Conceptual Framework

Theory Base

Prior to the administration of this study, the researcher employed the dependent and independent variable or known as the variable model with the support of the moderator variables. It shows the relationships of the dependent, independent and moderator variables (Nemiño 2005).
Porter (2004) on the other hand, enumerate five forces which contribute to industry profitability, these five forces include: a) buyers/customers’ power, b) supplier’s power, c) rivalry among competitors, d) threat of new entrant, and e) threat of substitute products. Furthermore, Porter (2004) summarized the direction of competition in the following: a) rivalry increases and industry profits fall as the number of dealers and concessionaire increases, b) rivalry increases when the overall industry production growth falls, and c) rivalry becomes volatile when dealers and concessionaires become more diverse in personality and strategic approaches.
Many authors on corporate imaging have identified market influences affecting profitability. Bagg (2003) listed down a variety of factors which include: a) level of technology, b) distribution costs, c) size of industry, d) volume of sales, and e) need for capital. There are also behavioral characteristics in terms of human being employed in the business; this includes managers who are optimistic about success.
In addition, according to Kotler, et al. (1996), to transform marketing strategy into marketing programs, marketing managers must make basic decisions on its marketing mix. This study applied the four marketing mix tools called 4 P’s: Product, Price, Place and Promotion.

Conceptual Framework
Nowadays, the influence of optical media among the society has increased the awareness of this new technology. Knowing that these products are entertaining as well as educational, these optical media have been imitated and pirated by some manufacturers and makers of pirated optical media products. There are new lots of vendors that are selling these pirated optical media in our society.
Profile of vendors selling pirated optical media are considered in this study and can be described through the age of the vendors, sex, its educational attainment, civil status, ethnic affiliation, reason’s for being in business, number of years in operation, nature of the business, capitalization, its location where the business is located, employment size, products/services offered and sources of products. Marketing practices employed by this vendor such as product, price, place and promotion. Also, business performance of pirated optical media vendors in terms of average number of optical media sold annually, sales in units, and profit are also considered.

Research Assumption
This study was conducted on the assumption that piracy business must have profitable considering that many entrepreneurs wish to go into this business.

Introduction to My Theses-Part I

INTRODUCTION


Background of the Study

Optical media is any device that stores information digitally including music, movies and computer software. This is a product that has been circulating in our society and creating its own name in the business industry. This includes the CD, VCD, DVD and computer software. These products have been patented and fully registered by the owners and manufacturers through government agencies that are empowered to list and register these products.

In this present society especially in the business world there is an issue that being face regarding these optical media products and we cannot deny that this issue affects our society and the business world. This is the so called piracy on optical media products. We could clearly see its proliferation that this piracy in optical media products are getting rampant and created problems for the entrepreneurs in terms of their business operations.

Before, there was no problem regarding these optical media products but since piracy invaded the business world, optical media products are now one of those easily pirated by the makers of these pirated optical media products. And this is creating an enormous problem among the producers of the original products. Among those affected by the piracy are the movie makers, music makers, and the computer software makers.

Despite efforts of the government to curb if not completely eliminate the piracy of optical media products, the government still loss some 1 billion pesos in potential revenues to optical media products (Oliva, 2003). Most of the sellers, if not all those selling pirated products, are not paying dues to the government in the form of taxes, business permits and other fees.

In Davao City, this underground industry has grown bigger and bigger. Vendors of pirated optical media are selling in various places such as: mall sidewalks, main streets, public market and other places. This study is focused on the business performance of pirated optical media vendors in Davao City, and to identify how this industry operates.


Statement of the Problem

The study was conducted to determine the business performance of pirated optical media vendors in Davao City. Specifically, this study sought to address the following concerns:

1. What is the profile of the pirated optical media vendors in terms of:

a. Age;
b. Sex;
c. Educational attainment;
d. Civil status;
e. Ethnic affiliation;
f. Reasons for being in business;
g. Years in business;
h. Nature of the business;
i. Capitalization;
j. Location;
k. Employment size;
l. Products/services offered; and
m. Sources of products?

2. What are the marketing practices employed by the vendors of pirated optical media as to:

a. Product;
b. Price;
c. Place; and
d. Promotion?

3. What is the business performance of pirated optical media vendors for the last five years measured in terms of :

a. Average number of optical media sold;
b. Sales in units; and
c. Profit?

Objectives of the Study

This study was conducted to determine the business performance of pirated optical media vendors in Davao City in terms of vendors profile and marketing practices employed. Likewise, it sought to know the business performance of this underground industry in terms of number of optical media sold, sales, profit and annual rate of new entrant.

Significance of the Study

This study is significant, specifically to the following:

The buyers, in which the result of this study will give them an idea with regards to this industry on what factors they are contributing to the vendors of pirated optical media whether in positive or negative way.

The vendors of pirated optical media through the findings of this study will help them to check and re-evaluate their business and determine what marketing practices they have employed. Moreover, this study will help them understand more this industry, thus improving their business.

The business students, in which the result of this study will help them, gain insights to this growing industry and to be able to understand how this underground industry proliferates.
The government that the result of this study will give them the idea and knowledge of how these underground economies are operating their businesses in the city and to know also the benefits that this industry will give to our government despite of being illegal. Looking positively this industry helps the government in terms of unemployment problems and also crime problems in the city. Giving this industry to be legalizing it would greatly help the government.

The researcher, for this study will deepen his understanding on the nature of this underground economy, in terms of business operations and performance or as well as the economic benefits of this industry to the society despite of its being illegal.

Scope and Limitations of the Study

The study was confined at generating information regarding the industry of pirated optical

media products such as CD, VCD, DVD around Davao City area. Likewise, it delved on determining the business performance of vendors of pirated optical media. This study was limited to the vendors of pirated optical media along the sidewalks of Victoria Plaza, NCCC, San Pedro Street, Ilustre Street and Matina Centro. The MTRCB classification of movies was not applied for this study since the vendors of optical media has no knowledge of this classification and all they know is to sell this optical media.

Furthermore, data on profit were not provided by the respondents. Instead the researcher constructed survey questionnaire that would lead to assess the effects of engaging in selling pirated optical media to the vendors.

Definition of Terms

The following terms are defined as used in this study:

CD also known as compact disc for music and movie optical media.
DVD also known as digitalize video disc for movie optical media.
Ethnic affiliation refers to the class or group of ethnic affiliation in our country.
Government refers to the governing body of a certain state or nation that implements all the laws and regulations of a state.
Location refers to the place where the business is situated.
Market refers to an arrangement whereby buyers & sellers interact to determine the prices and quantities of a commodity.
Marketing practice refers to the marketing techniques used by the vendors in terms of product, price, place and promotion.
Movie optical Media refer to the optical media related to movies. These are in CD and DVD form. These movies are in English and Filipino and categorized as children’s/cartoon’s, comedy, action/adventure, drama, horror/suspense, science fiction/fantasy, rated, x-rated, religious and musical.

Music optical Media refer to the optical media related to music. These are in CD, VCD, DVD form. These music are in English and Filipino format categorized as CD Music, CD Music-MP3, VCD Videoke and DVD Videoke.
MP3 refers to music file being transformed for computer use, I-pod, cellular phones and other devices.
Outside the mall refers to a place where there is a pathway in the vicinity of the mall where vendor conducts business.
Piracy refers to the unauthorized use of another’s production or invention (Merriam Webster, 1994).
Pirated refers to the copyright material without permission to duplicate or use copyright or patented material without authorization or without the legal right to do so (Microsoft Encarta Dictionary, 2005).

Place refers to channel of distribution that serve as the means for getting the product or service offered to the customers.
Price refers to the cost and amount that serves as the offerings in lieu of the product offered.
Products/services refer to the commodity being offered for sale by the small enterprises.
Promotion refers to the marketing ads and promo of a certain product.
Rated movie refers to Restricted, under 17 years old requires accompanying parent or adult guardian.
Sidewalk refers to the place where the vendors conduct business and this is commonly along the footway or pathway of the premises. This will not include the vendors all the mall premises.
VCD refers to video compact disc for music optical media.
Vendors refer to the seller of pirated optical media
X-rated movie refers to sexually explicit, vulgar, or obscene, and it is not suitable for children. Labels for movies implying strong adult content, typically pornography or violence.
Years in Business refer to the number of years the business has been in operation.

My Theses

Abstract of the Study

The study was conducted to determine the business performance of pirated optical media in Davao City in terms of: profile of the vendors selling pirated optical media, marketing practices employed, business performance of pirated optical media vendors and the most saleable pirated optical media for both movie and music optical media.

The descriptive method of research was used in this study. Primary data were drawn out from interview survey questionnaire given to the selected vendors of Davao City.

Findings showed that most of the respondents belong to the age bracket of thirty-one to forty years old and most of the vendors are male. Most of the respondents were also in high school level and generally married. All the respondents are Muslims and they engaged into this business since this enables them to earn profit easily. Respondents have stayed in the business for at least 3.45 years with an average of 6,196 pesos initial capitalization. Respondents engaged their businesses mostly in the sidewalk and had at least one employee. Pirated optical media are commonly sources are within the city and transactions are mostly cash basis. Products that are being sold by the vendors are pirated movie optical media and music optical media. The most and commonly saleable pirated optical media in various format are children’s/cartoon, comedy, action/adventure, CD music and VCD videoke. Business performance of selling pirated optical media are determined through average number of pirated optical media sold annually, sales, profit and annual rate of new entrant. Finally, findings showed that pirated optical media industry is performing well in terms of profit and vendors of pirated optical media are reaping benefits. Vendors of pirated optical media have no other means of income and were able to purchase some properties such as house, appliances and motorcycle through the income derived from selling pirated optical media.