In order to havea deeper understanding of the nature & reasoning involved in the financialbehavior of Filipinos, this case study hopes to use the marketing strategy ofCebu Pacific to gauge such behavior.             Because a marketing strategyinvolves in-depth analysis of customers, it is a useful medium that containsinsights of customers. Turning people into consumers means that a company hassuccessfully catered to the needs & wants of the people (Berthon, Pitt, Plangger, & Shapiro,2012).

Furthermore, since the marketing strategy iscreated from the value proposition of a company, the findings of this studybecome more supplemented with key ideas.            The findings shall then be useful toassess the strengths and weaknesses of the financial behavior of the Filipinosand will be beneficial to companies, organizations & Filipinos.        B. Significance of the StudyThereis no current literature that correlates how Cebu Pacific adopts and adaptstheir marketing strategies to Filipino financial behavior. Concentrating on thesocial sciences perspective, this study will be based on economic and socialperspectives.

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Related literature on these approaches have been conducted by Saffarzadeh,M., Mazaheri, A., Tari, M., & Seyedabrishami, S. (2016) in their studyentitled “Analysis of Iranian passengers’ behavior in choosing the type ofcarrier in international air travel to East Asia” while Buaphiban, T.,& Truong, D. (2017) constructed an “Evaluation of passengers’ buyingbehaviors toward low-cost carriers in Southeast Asia”.  After reading such studies and realizing thatit had not been applied into Filipino context, the author wants to be a pioneerin this area of literature.

The ultimate purpose of this study would be togenerate an analytical approach to the Filipino financial behavior to determinestrengths & weaknesses that will be beneficial to improving the Filipinofinancial outlook. C. Objectives1. To constructan overall link between the marketing strategy of Cebu Pacific & theFilipino financial behavior.2.

To study why& how the marketing strategy of Cebu Pacific caters to the Filipinofinancial behavior.3. To learn thestrengths & weaknesses of the Filipino financial behavior.4. To seek areasof improvements and gain better insight of the Filipino financial behavior D. Hypothesis            The target market of Cebu Pacific(individuals aged 18-25 years old) sees price as the most important salesdeterminant which indicates their financial outlook.

E. Methodology1. Design of the studyThis is aqualitative case study research wherein findings are derived from primary andsecondary data. Primary data is attain through online surveys while secondarydata is sourced from online peer-reviewed journals & papers published byestablished organizations such as the World Bank & Standard & Poor. Companyinformation is sourced from articles published by Cebu Pacific.2. Theoretical Framework Kim & Lee (2011)attribute behavioral intentions affected by customer satisfaction as the mostimportant behavioral determinant according to the Theory of Reasoned Action(TRA), the Theory of Planned Behavior (TPB), and Behavioral Reasoning Theory(BRT) (Hill, Fishbein & Ajzen, 1975)In this qualitativeresearch case study, the interpretive theoretical perspective is used as abasis to lead the collection of data and analysis. According to Jones, Torres,and Arminio (2006), pursuing a theoretical perspective in qualitative casestudy research “adds philosophical wealth and breadth to a case study andgives guidance for the plan of the contextual investigation” (p.

54).3. Analytical Framework                    Toanalyze the study, the researcher used an illustrative diagram above to showthe relationships among consumer behavior, marketing strategy, financialbehavior, social influences & public perception. The study would focus onthe concepts mentioned above to attain an overall link between the marketingstrategy adopted by Cebu Pacific and the Filipino financial behavior.

4. Population and samplingNonrandomsampling will be used specifically for purposive and sequential sampling.Purposive sampling is beneficial because subjects should be selected withpreset qualifications since the topic of this research still deviates to aparticular population.  Sequentialsampling will be used to account for all new cases on the topic of research.

5. Instruments to be used            The study uses primary data attained through onlinesurveys while secondary data is sourced from online peer-reviewed journals& papers published by established organizations such as the World Bank& Standard & Poor. Company information is sourced from articlespublished by Cebu Pacific.6. Treatment of DataAnalyticalstrategies for qualitative data will be used such as searching for patterns likerecurrent behavior, objectives, concepts and themes.

After a pattern isconstructed from the data, social theories and settings will beidentified.  In the end, data will beused to arrive at a general interpretation of meaning.7. Scope and Delimitations            The study is confined to the concepts involved inthe behavioral, social, marketing & financial setting. The scope is limitedto research among individuals aged 18-25 years old and who are currentlyresiding in Metro Manila.

There was no preference to occupation since thetarget market of Cebu Pacific ranges from students, young working adults andfrequent fliers.            The study is therefore delimited tothe interviewees who fulfill the age and location requirements. This ensuresthat there is a specific target that answers to those envisioned by CebuPacific.

8. Locale of the studyPlace: MetroManila Demographics:Between the ages of 18-25Locale:Participants currently reside in Metro Manila and have had experience with thedomestic airline industry flying with Cebu Pacific.F. Ethical considerationsThisstudy shall ensure that neither participants nor data is subjected to unethicalconduct such as prejudice to age, gender, sexuality, religion, race and socialstatus etc. Subjects would not be coerced and opinion shall not be construed bya given set of motives. Anonymity, privacy, and confidentiality will beprotected and any inequalities that may arise will be dealt with in line withthe objectives of this research.Chapter II.REVIEW OF RELATED LITERATURE1.

Business ModelOn October 22, 2012, JG Summit’s BachJohann Sebastian, Chief Strategy Officer at JG Summit Holdings, stated thatCebu Pacific adopts a 3-step strategy to brave the intense business atmosphereamong low-cost carriers (LCCs). These are to buy fuel early, offer affordable& no-frill fares, and purchase contending carriers to gain larger stakes(Visconti, 2012). Though this article mentions such strategies, the authorsimply took the business approach and did not cite in-detail why & how CebuPacific undertook these strategies. Diaconu (2012) mentioned four models andcompared them with the models procured by Francis, Humphreys, Ison, and Aicken(2006).

Therefore, I consider Diaconu’s work exhaustive because each of thefour models was then situated on American & European airline carriers.Buaphiban & Truong (2017) illustrate thatthe greatest LCCs working in Southeast Asia are AirAsia and Indonesia’sLionAir. Economic conditions in Southeast Asian developing nations, forexample, Indonesia, Malaysia, and Thailand are viewed as perfect examples forthe expansion of LCCs due to rising working classes and a thick populace inrestricted land transportation choices (Bland, 2014). Thailand, alongside thePhilippines, is thought to be one of the friendliest nations for LCC operationsand is anticipated to be a noteworthy market for LCCs (Teng and Perry, 2013).These studies were very useful because they correlate passenger behavior withLCC ticket sales which is an angle that I would like to delve into in thispaper. Hooper (2005) adds to this angle by writing on the Southeast Asian airtravel situation, stating that labeled models cannot be completely adopted butrather be adjusted to regional conditions and approached his study by analyzingnetwork structures among LCCs.

While this paper does not endeavor to recognizethe profitable business models among LCCs, this research shows that there isobviously no holistic ideal model. Suited to the social, financial, andpolitical sectors Hooper (2005) points out that imitating a solitary successfulmodel, i.e. Southwest, should be dealt with cynicism. Moreover, in oppositionto past studies, Hooper (2005) correctly argues the reality that various LCCseffectively work through concentrated networks.Furthermore, there is a new model tolook out for- the ULCC (ultra-low cost carrier). By keeping their work costslow, unbundling fare packages, and concentrating on methodologies that expandreturn on capital, ULCCs have possessed the capacity to offer lower basepassages (Nicas, 2012, 2013). However, in spite of their undeniable presence,ULCCs have not turned into a conspicuous specialty (de Wit and Zuidberg, 2012;Chang and Yu, 2014).

This study suggests that the ULCC model remainsinadequately characterized and unrecognized in the scholarly and businesssectors. Also, Bachwich & Wittman (2017) underlines the threat ofULCCs against LCCs. Their study is groundbreaking as it challenges currentresearch where they point out that the ULCC model has a more prominent impacton decreasing base charges in U.S. domestic carrier markets than the moreestablished LCC model.

2. Sales determinant After utilizing the EFE Matrix andcreating an economic analysis of external factors to infer potentialopportunities and threats of Cebu Pacific., Alfelor (2013) noticed thataccording to her results, cost and service quality have the most elevatedbearing as sales determinants. A shortcoming in her examination is that itneglected to make novel showcasing arrangements since her marketing solutionshad just been specified by JG Summit’s Bach Johann Sebastian last October 22,2012. She accurately contends that Cebu Pacific uses the Best-Cost Providerprocedure since it upholds the organization’s target which is to become global,offer premium service that will attract customers & become the preferredairline that will meet customers’ needs. To obtain various strategies, she usedPorter’s structure examination. In this manner, her work substantiates theincalculable strategies to hold Cebu Pacific’s fortress as the overwhelming keyplayer in the domestic market.

Saffarzadeh, Mazaheri, Tari, & Seyedabrishami(2016) released a journal entitled “Iranian passengers’ behavior inchoosing type of carrier in international air travel to East Asia”.According to their results, the sales determinant among LCCs is the ticketfare, the possibility of travel on desired date and time, international airtravel experience, Frequent-flyer program (FFP) membership status, maritalstatus, and gender. Their study is validated through a quantitative approach asthey used the orthogonal main-effect to arrive at parametric estimations. Thestrength of their study is they conducted face-to-face interviews and acquired480 responses. Though I would like to visit an airport to conduct surveys aswell, I think that this is extremely difficult considering the organizationaland social incidences involved such as being labeled as a scammer or part of amodus operandi. A weakness that I can see is that there is a risk of errorbecause participants may be in a hurry or realize that the interview tooklonger than they expected.

Murakami’s research (2009) iscritical since it offered an explanation for the absence of an expanded marketdemand. The reason is most likely that Tokyo (Haneda) was too congested thatLCCs were not ready to enter which hampered demand for LCC carriers. The studyis pivotal because it accounts that the relationship between prices &output is situational.

Therefore, this study would be useful in my researchbecause my focus would be on the social and economic aspects involved which arevery situational to create a link to the marketing strategies of Cebu Pacific. 3. Service quality             Chie Tie and Nizam (2015) perceive that serviceconducted in LCCs assumes an essential part in influencing a traveler’sbehavioral expectations.

They conducted analysis using SEM & foundthat airline attractiveness has a significantly positive influence on serviceperceived, a relationship suggesting that the respondents who are attracted byAirAsia to visit Taiwan will have higher satisfaction in relation to airlineservice quality. This is influential to the study because it considers behavioras a determinant that relates to service quality. In my case, I would be usingbehavior as a determinant of the marketing strategy. One weakness I can seefrom this study is that they did not specify which behavior they focused on sothe wide span of the study is a challenge.

Service expected is found influentialon service perceived, and concurs with Park et al. (2004’s) research whichinfers that travelers’ desires are found to have a huge constructive outcome onservice perceived. Furthermore, service perceived is found to have asignificant positive influence on destination image. This study is veryeye-opening because it considers the influence of service on the destination.The destination is definitely a key element when procuring a marketing strategyso the study introduces a new component that can be studied & furtherimprove future research.In Chen and Tsai (2007), their studyproposes that service perceived assumes influences a traveler’s futurebehavioral perspective in returning to a previously visited location andincreases chances of recommending that destination to peers. Because of thequantitative nature of this study using StructuralEquation Modeling (SEM), the hypotheses were adequately tested & causalrelationships were identified through variables. I would also like to use thisapproach to my study but I think it is too advanced for me because I do not knowhow to use this method.

In any case, this research encourages that a new keyelement, services, has a relationship with destination perception. Kim & Lee (2011) attributebehavioral intentions affected by customer satisfaction as the most importantbehavioral determinant according to the Theory of Reasoned Action (TRA), theTheory of Planned Behavior (TPB), and Behavioral Reasoning Theory (BRT) (Ajzen,1985; Baker & Crompton, 2000; Fishbein & Ajzen, 1975; Westaby, 2005).Among all the journals I have read this is the first to offer theories onbehavioral science. Considering that the study was supported by psychologicalsources, it is a breakthrough and also serves as a pathway forinterdisciplinary & transdisciplinary connections with Social Sciences. Theweakness is that the results become too technical as the resulting numbers werenot thoroughly explained.

4. Patronage             The purpose of Kuosuwan’s research(2015) was to research market factors which could influence the decision makingof customers to patronage low-cost carriers in Thailand. This study supportsprevious literature which revealed that the first three market factorsinfluencing the decision of respondents to patronize low-cost airlines were lowprice, the channel of buying a ticket, and promotion factor. The researchreinforces that whether service, destination or behavior are used as variables,the primary reason for ticket sales is the price. The weakness of the study maybe attributed to the use of a combination of the qualitative and quantitativetechniques because combining techniques poses efficiency issues where it wouldbe relatively easier to focus on just one approach.Akamavi,Mohamed, Pellmann, & Xu (2015) show that passenger loyaltyis one of the key indicators that influence competitive advantage (e.

g.,share-of-wallet, market share). Although prior studies have paid a great dealof attention to customer loyalty, this research uses the key determinants(e.g., service recovery, service employee self-efficacy, passenger trust,passenger satisfaction) of passenger loyalty in the LCA industry.

In thissense, the study brings light to another concept that complicates the impact ofthese determinants with regard to the loyalty of LCA passengers. The study wasnot limited at all because it mentioned several previous works to support theincoming premise that passenger satisfaction is the uppermost driver ofpassenger loyalty enhancement, not of price. The weakness lies in the fact thatthe study is the primary differing opinion about past majority strategies whichallude ticket sales to price. In another way, this weakness becomes a strengthbecause it needed to all the more outline the key determinants to support itsconclusion.

5. Financial BehaviorHanna, Lee & Lindamood (2015) treatedAsian households as a separate racial/ ethnic group to compare twelve financialbehaviors and attitudes of Asian households to those of three other racial/ethnic groups: White, Black, and Hispanic. Using multivariate analyses with the2010 Survey of Consumer Finances, they found differences in sevenbehaviors/attitudes between Asian households and each of the other threehousehold types. This study is one of the few available research that comparesfinancial behavior using race with a focus on Asians. Also, the study validatesthat there are pertinent financial behaviors more evident in Asians such asinvestment risks, late payments, and savings. Furthermore, the use ofmultivariate analyses is an effective way to conduct a systematic analysis of differencesbetween Asians and each of the other groups. A weakness of this study is thatit did not consider present social issues concerning Asians.

It relied more onpast literature that discussed financial attitudes and behavior in Asians. Itwould have been more inclusive if the issues mentioned current issues thatAsians are struggling with today regarding finances.Lee (2013) touched oncredit application & concluded that Asian women were more likely to bediscouraged by potential lenders than White men even after having proxies forcreditworthiness.

This study is monumental because it focuses on women and thetopic is the first of its kind. The weakness lies in the fact that even thoughthis study shows that there are no statistical differences between Asian menand Asian women and between white women and Asian women, it does not mean thatthese findings eliminate any possibility of gender and race discrimination inthe credit market. Asian women, as well as Asian men, might have been affectedby some unobservable factors from the SCF data such as discrimination. Forexample, some dimension not controlled for in this analysis might induce Asianwomen to perceive a tighter credit constraint or stricter underwriting standardcompared with their white counterparts. Also, today’s gender discrimination isexpressed in unobtrusive and undisclosed ways (Folbre, 2010).6.

Financial LiteracyThe Standard and Poor’sRatings Services Global Financial Literacy Survey tests four fundamentalfinancial topics: risk diversification, inflation, numeracy, and interestcompounding. Because only 150,000 adults participated in 140 nations, thissurvey does not adequately represent the world population. Though it was ableto conclude that numeracy and inflation were the most known concepts & riskdiversification is the most unknown concept, the study limited itself tosurveys to gather data (Klapper, Lusardi & Oudheusden, 2014).There are other dynamics which can be used considering that money is somethingthat people do not easily talk about.

Another weakness is that these financialconcepts may not be known in meaning but may be known in application.Therefore, the study would have been more groundbreaking if active and moderntests were conducted instead of simply asking people in face-to-faceinterviews.Asindicated by the World Bank Group (2015), around 42% of adults in thePhilippines report owning an account at a formal financial institution (bank),which is a regularly utilized metric for worldwide assessment. When contrastedwith other lower-middle income economies, the Philippines has a generally highlevel of financial inclusion however it lags behind the normal level among EastAsian and Pacific economies. Once more, novel methods for evaluating financialcapacity should have been practiced like mystery shopping and focus groupdiscussions with buyers as intense supervisory devices to be utilized todetermine why banks and their products satisfy their clientele less than othertypes of providers.

Therefore, mystery shopping should be organized & thecustomers need to ask similar queries in comparable situations. Focus groupdiscussions are another effective way to derive perceptions & beliefs withregards to the most vital issues and concerns they have with banks. 


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