Chapter-1 (1).docx

University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City

Title:

SALES PERFORMANCE OF HOME IDEAS SUPERSTORE GROUP IN CALASIAO, PANGASINAN

Researchers:

May Ann U. Ilumin Ravenna M. Dela Cruz Winaliza C. Sison Stephanie V. Bautista Kate Joanne R. Ang Chloie R. Delos Santos Mari Antoineth D. Fabia Katrina Marie M. Orbino Mary Ann P. Ramirez

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City CHAPTER 1 THE PROBLEM AND ITS BACKGROUND Rationale According to the article posted in the website of Market Research entitled Home Centers & Hardware Stores Market Research Reports & Industry Analysis, the home center and hardware store industry comprises stores that sell a wide spectrum of home maintenance and repairs items such as electrical goods, hardware, and a variety of tools. In addition, home centers and hardware stores often sell structural material and different forms of lumber for any home repairs, renovations, or construction. Entities under the home center and hardware store industry purchase products from manufacturers and wholesalers, and then proceed to selling the goods to independent consumers as well as professional contractors.

Between consumers and manufacturers, distributors in the home center and hardware industry serve as liaisons. By purchasing products in bulk from different manufacturers, entities sell these products in small quantities to consumers. In this way, consumers can purchase different items from different manufacturers. Products bought in bulk may consist of cables, connectors, bolts, networking materials, screws, floor tiles, some home construction materials and wiring devices.

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City There are different factors that affect demand and profits for this industry: home remodeling and repair, construction, hardware retailing, new home building, and telecommunications all require products retailed in this industry. Sales performance depends on efficient management of a company’s inventory, as well as use of effective advertising strategies. Large companies have an advantage in that their distribution networks are expansive, and as such they can provide consumers with a wide selection of products and services. Smaller companies prioritize providing specialty items, stocking products based on their consumers’ needs, and providing excellent customer service. Individual operators rely on purchasing quality products at a lower cost, strategic merchandising,

and

competitive

prices.

(https://www.marketresearch.com/Consumer-Goods-c1596/ConsumerGoods-Retailing-c80/Home-Centers-Hardware-Stores-c665/)

Based on industry trends, Hardware Stores industry has grown steadily over the five years to 2018. The boom in construction markets significantly influence the industry as companies under the said industry key activity is selling its goods to contractors and consumers engaging in building repair and renovation projects. Individuals have started home improvement projects as the housing market has strengthened and consumer confidence has been revived. Because of low mortgage rates during the period, individuals are also encouraged to purchase and renovate new and old homes. The trend of construction activity

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City leads the demand for industry products from both contractors and individual consumers to increase (N.A., 2018). (https://www.ibisworld.com/industrytrends/market-research-reports/retail-trade/building-material-gardenequipment-supplies-dealers/hardware-stores.html) In the article posted by the website of Mordor Intelligence (2018), it states that Philippines is known as a disaster prone country. Thus, consumption of FMCG goods can increase or decrease suddenly. Philippines retail market is driven by large and young consumer’s market base and an expanding middle class with high disposable income. Through economic and social growths and population growth, Philippines’ retail industry continues to maintain its standing. The key factors that could affect the growth of retail industry are rising population, growing youth segment, changing consumer trends and rising purchasing power. Retail industry in the Philippines region will expand at a CAGR of 8.3% over 2013-18. Most of Filipino consumers prefer cheap and best goods. The traditional Sari-Sari convenience stores (Variety stores) cover the large portion in the market share because the demand is mostly of cheap goods. Philippines retail sector is driven by rising income, consumer confidence and increasing high net worth Individuals. Majority of Philippines’s have relatively low income, because of less agricultural production and disaster prone

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City locations. People prefer to save more money rather than spending. ( https://www.mordorintelligence.com/industry-reports/retail-industry-inphilippines) Based on observation, Pangasinan notably has numerous construction and new infrastructures such as CSI malls, NEPO mall, Robinsons malls and supermarkets, De Venecia Road and some other residential and non – residential constructions. As philosopher George Santayana once said, “Those who cannot learn from history are doomed to repeat it”. The statement not only applies to political matters but also in world of business. One of many ways to measure an entity’s sales progress over a period of time is through sales performance analysis. Ignoring sales performance analysis can put an entity into disadvantage compared with the competition. There could be a continuous unnoticed error or defect if regular analysis of the situation is not executed. It is wise to address issues as early as possible so that proper steps can be applied to resolve them regarding sales process (Balle, N.D.). (https://smallbusiness.chron.com/salesperformance-analysis-2211.html) A Sales Performance Analysis is a way of assessing where your business currently stands compared to where it wants to be in the future. It uses industry businesses standards, performance, and other elements for comparison. The analysis shows the gaps between the current state of your business and how it

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City should be performing and what are the causes for the gap in between. As an organization grows, it loses its original track of some objectives and even relationships with customers and peers. That is why businesses need gap analysis: to put them back on its original track (Mayer, 2018). Through

the

analysis

of

sales

performance,

the

entity

provides

comprehensive review of business goals by the use of actual and desired results. In addition, the analysis is significant in company’s decision-making. With this, company tends to focus its efforts and make informed decisions especially in resource allocation. Better focus and decision making as a result of sales performance

analysis

boosts

customer

relations

(Mayer,

2018).

(https://www.td.org/user/content/alenmayer/what-is-a-sales-performanceanalysis-01-31-18-03-43) The study is conducted to help the chosen entity’s sales team to identify their weaknesses in their sales strategy and be able to make changes to help them improve the results over the next period. Home Ideas Superstore Group located in Calasiao, Pangasinan is chosen by the researchers as the subject of the study. As hardware stores industry has grown steadily over the five years to 2018, researchers are curious on how this kind of entity performs based on their sales and how they contribute to the growing industry. Moreover, the researchers are quiet interested on the sales trend of the entity which is vital in the

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City measurement of overall sales. The researchers aimed to gain a deeper understanding and knowledge about the subject matter of the study. The researchers focused on the analysis of the entity’s sales through the comparison of actual and budgeted sales. Basically, income statement is the primary record focused in the conduct of the study. Statement of the Problem The study aimed to ascertain the performance of Home Ideas Superstore Group in Calasiao, Pangasinan. Further study covers the status of venture in sales, identifying issues and concerns determining probable measures for the improvement of business process and operations. Result of the study mainly served as the bases for further development of subject sales performance activities of the business, might as well to interested individuals to endeavor in this particular research. Specifically, it is premised on the following questions: 1. What is the sales performance of Sizzling County based on the following: a. Comparison of Target Sales and Actual Sales; b. Assessment of cost effectiveness by comparing actual cost against its cost budget; c. 2. What problems are encountered by Sizzling County in Tapuac District in their sales performance?

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City 3. What probable measures can be proposed to improve the sales performance of Sizzling County in Tapuac District? Scope and Delimitation The researchers focused their study of Home Ideas Superstore Group in Calasiao, Pangasinan pertaining to its sales performance. Measuring the sales performance by its very nature entails gathering data about leads from multiple sources and being able to put that information into measurable, quantifiable and actionable information. This research study is conducted mainly at Home Ideas Superstore Group that focuses on the comparison and evaluation of the sales variances in order to assess the sales performance of Home Ideas Superstore Group. The study has been undertaken purely from the viewpoint of the Officer In charge himself in order to set up a long-term development of the hardware store. The researchers used evaluative, comparative and documentary method to come up with relevant output. The researchers analyzed and studied the comparison between the projected sales and actual sales of Home Ideas Superstore Group on a monthly basis. The comparison and evaluation were done for every first month of every quarter. In addition, the researchers interviewed the Officer in Charge for some clarification of the data gathered. The interview was conducted by using a questionnaire in order to test its effectivity.

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City The study also covered issues and concerns in determining probable measure for the improvement of the business. This involves the observation of their sales operations and customer engagement on a daily basis. In assessing the sales performance of the Home Ideas Superstore Group, the researchers will use the entity’s available sales records. Significance of the Study The conduct of this research about the Sales Performance Analysis of Home Ideas Superstore Group is significant not only to the researchers but also contributes for the benefit of the following: Home Ideas Superstore Group Management The results of this study will be beneficial to the management of Home Ideas Superstore Group so they can improve the way they run their business. Other Similar Businesses The research study can be of help to owners of similar kind of business that will serve as their basis and guideline in analysing their sales performance. This will help them gain more knowledge to at least prevent undesirable problems that may hinder the success of their business. The Accountancy and Business Students The study will further help present and future accountancy and business students to be exposed to actual business operations and have a deeper understanding and knowledge about Sales Performance which they can use in their future profession.

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City Future Researchers Future researchers can use this market research as a guide and reference material in doing their own research study. Business students will learn competitive advantage and it will also serve a future reference to inspire them to build their own business entity in the near future. Definition of Terms The following terms hereunder defined operationally and/or conceptually based on their usage in the study to provide a clear understanding of ideas: Sales Performance of Home Ideas Superstore Group Sales performance use raw data concerning the number of customer a sales associate speaks to compared with the number of actual sales. By reviewing the sales performance of an employee, a sales performance manager can determine his strengths and weaknesses. Projected Sales A sales projection is the amount of revenue a company expects to earn at same point in the future. It is a prediction that is synonymous with a sales forecast. Both help determine the health of a company and whether sales will trend upward and downward. Actual Sales Actual sales is the amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any discount allowed.

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University of Luzon COLLEGE OF ACCOUNTANCY Dagupan City Problems encountered by Home Ideas Superstore Group in terms of Sales Performance These are the hindrances and difficulties encountered by the entity in the sales performance of Home Ideas Superstore Group. These also refer to possible outcome to the problems encountered by the entity. Proposed Measures in Sales Performance of Home Ideas Superstore Group These are probable solutions to each addressed problem encountered and recommended actions on how to enhance the status of the sales performance of Home Ideas Superstore on the problems that have been identified. These solutions and recommendations can be adopted by the entity.

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