Chapter I

Introduction

Background of the study

Strategic cost management is essential for business for a good business

performance, as this method helps to increase and support competitiveness in the

industry (Mohammed, 2022). Strategic cost management an approach used by

businesses to manage costs in a way that aligns with their overall strategic objectives.

Gilaubicas and Kanapickiene (2015) conclude that utilizing more SCM techniques

combat intensified competition. It involves the deliberate and systematic management

of costs across all aspects of an organization's operations to enhance its

competitiveness, profitability, and long-term sustainability. It enables organizations to

operate more efficiently, competitively, and profitably in today's dynamic business

environment.

Aside from profit, operating for a long-term is one of the goals in creating a

business. But running bakeries isn’t easy at all. As challenges in the food industry in

general include environmental concerns, safely, hygiene, freshness, sustainability and

financial constraints. (Hansen & Jacobsen 2013). These challenges make it tough for

bakeries to stay strong in bakery industry. The Strategic Cost Management methods

provide information “which is externally orientated, market-driven, and customer-

focused” leading to sound decision-making (Emiaso and Amaechi, 2018).

In the context of the bakery industry, where margins are often thin and

competition is high, strategic cost management becomes even more critical. Bakeries,

like any other business, incur various types of costs, including raw materials, labor,

overheads, and marketing expenses. The ability to manage these costs strategically
1
can significantly impact a bakery's profitability and competitive advantage. However,

the application of strategic cost management goes beyond mere cost-cutting

measures. It involves a comprehensive analysis of the company's cost structure,

identification of cost drivers, evaluation of cost behavior, and implementation of cost

control and reduction strategies. It also includes the integration of cost information into

the strategic planning and decision-making processes.

Moreover, strategic cost management is important in analyzing business

performance. By providing valuable insights into cost efficiency, productivity, and

profitability, it allows bakery owners to evaluate their operations, identify areas of

improvement, and make informed decisions that enhance business performance.

Ranger (2023) said that gaining a strategic edge is essential for organizations to thrive

and achieve sustainable success. The objectives of this study is to have a

comparative analysis between strategic cost management and business performance

of bakeries, offer bakery entrepreneurs insight on how to improve their cost structures,

improve profitability, and become more marketable.

2
Theoretical framework

The theory of business performance of bakeries focuses on factors like

innovation, customer orientation, and employee motivation. In a time of globalization

and an increasingly competitive environment, measuring and improving performance

has become critical to business success. The inadequacy of traditional financially

based performance measurement frameworks and the introduction of non-financial

measures have triggered a considerable amount of research and attention over the

past fifteen years, to the extent that it has been described as a revolution (Neely,

1999).

Administrative Management Theory (Henri Fayol 1925) was a theorist who

believed in a theory which was based on how management interacts with the

performance of a business and focuses on how management and workers are

organized within a business to allow for the completion of task. It posits that the

effective organization of management would ultimately have an effect on the

productivity of operational level workers.

Herzberg’s motivation- hygiene theory (Herzberg 1959) is a performance

management theory that dictates there are two types of factors that motivate

employees. Hygiene factors refer to the requirements necessary for an employee to do

their job, like pay and working conditions. Another name for them is maintenance

factors because they keep employees from becoming dissatisfied with their jobs.

Motivational factors, refer to the things that inspire people to do great work and feel

good about doing it, like recognition and achievement. There also called growth factors

because they can help people grow as individuals and professionals.

3
Conceptual framework

The conceptual framework establishes a solid foundation for examining the

interconnections and relationships between key variables.

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Strategic Cost Management
 Activity-Based Costing Business Performance
 Target Costing
 Life Cycle Costing

MODERATING VARIABLE

Demographic Profile
 No. of Years in Operation
 Location
 Types of Business Ownership

Figure 1. Conceptual Framework

4
 Statement of the problem

This study aims to understand the influence of strategic cost management to the

overall business performance among bakeries. The study seeks to answer the

following question:

1. What is the demographic profile of the bakery in terms of:

a) No. of Years in Operation

b) Location

c) Types of Business Ownership

2. What extent the following methods of the strategic cost management method affects

the business performance of bakeries:

a) Activity-Based Cost (ABC)

b) Target Costing (TC)

c) Life Cycle Costing (LCC)

3. Is there a significant relationship between the demographic profile and the strategic

cost management method?

5
 Hypothesis of the study

Ho1: There is significant relationship between the demographic profile in a

strategic cost management of the bakeries.

Ho2: There is no significant relationship between the demographic profile in a

strategic cost management of the bakeries.

Significance of the study

The findings of this study will be beneficial to the following:

Managers/ Owners: The study helps managers and owners of bakeries

understand how to optimize their cost structures for increased profitability and better

business performance.

Investors and Financial Institutions: Investors and financial institutions

interested in the bakery industry can benefit from the study's analysis of business

performance metrics and financial indicators.

Customers: This study will help them to gain information on how strategic cost

management effective in the business.

Future Researchers- This study can be used as a future reference for student

researchers interested in studying similar topics and methods as this research. It may

give insight to future researchers in areas of strategic cost management on analyzing

business performance.

6
 Researchers- This study can help the researchers by gaining deeper

understanding in SCM that they can use as their useful reference if they plan to build a

business.

Business- The study can benefit the business by improving their cost

management practices to lead them to achieve their target and to be more competitive

in industry.

Employee- This study can help employees to improved their decision making

and deeper their understanding in strategic cost management.

Scope and delimitation

This study focus on strategic cost management analyzing business performance

of bakeries. The study will take place in Koronadal City. The thirty-eight (38)

respondents are the owners, managers, and key staff involved in the financial and

operational management of the bakeries limited in Koronadal City.

7
Definition of terms

Activity Based Cost- a cost accounting method that identifies the costs

associated with each activity performed in the production or delivery of a product or

service.

Bakeries- a place for baking or selling baked goods. Like bread, cakes, and

other similar products.

Business Performance- refers to a business ability to meet it aims and

objectives.

Life Cycle Costing- is a technique for evaluating the total cost of ownership for

an asset or product throughout the span of its full life, from purchase to disposal.

Strategic Cost Management- this refers to application of cost management

techniques to improve business performance.

Target Costing- is a cost-management technique where the target cost of a

product is determined by market research and intended profit margins.

8
 CHAPTER II

Review Related Literature and Study

Related Literature

The Review of related literature involves the systematic identification, location,

and analysis of documents containing information related to the research problem. The

term is also used to describe the written component of a research plan or report that

discusses the reviewed documents. These documents can include articles, abstracts,

reviews, monographs, dissertations, other research reports, and electronic media. The

literature review has several important purposes that make it well worth the time and

effort. The major purpose of reviewing the literature is to determine what has already

been done that relates to our topic. Another important purpose of our reviewing the

literature is to discover research strategies and specific data collection approaches that

have or have not been productive in investigations of our topics.

Content analysis is a method utilized in psychological and social science

research was used in the study. It has three steps; firstly, the concept aspects were

examined; secondly, it discussed the components such as uniting and sampling; it

concludes by showing the readers how to trace the analytical paths and apply

evaluation techniques. Krippendorff (2018). One of the major industries involved in the

manufacture of food items is the bakery industry, nevertheless, major factors contribute

to the success or failure of small bakery businesses existing in highly competitive

environments. Based on cluster analysis, which identifies the major participants in the

Finnish market for bakery and confectionery goods, the observations are made.

9
Number of Years in Operation

An operational plan for a bakery business will help you determine what you

need to make it run smoothly. An operational plan details the physical requirement of

running your business. According to Dettori et al. (2020), he stated that with the

imitation of new features and the increase in the number of new offers, customers have

acquired new choices that made them more price-sensitive. Business proprietors,

recognizing this shift, have adopted diverse customer-centric strategies to distinguish

themselves in the competitive market and attract a broader customer base. Smith

(2018).

Kubicová, L. et al., (2018). The production of bakery goods is anticipated to decline in

the upcoming years. The pre-baking and freezing technologies used for bakery goods is the

cause. The bakery industry has come a long way, and will continue to evolve with countless

of bakers bringing creativity into the industry. The Baked foods production has been in

existence for tens of centuries. In the true sense of the word, it has been around for over two

thousand years. Van Der Spiegel et. Al. (2017) Inappropriate management of food production

operations cause several quality performance problems. Therefore, the actual contribution of

food quality management to quality performance has to be revealed.

The amount of time a facility or organization has been in operation. In the provided

abstracts, there are references to years of operation in different contexts. Despite being the

largest category, the majority of the risk is posed by two family-owned macro businesses with

a precarious economic condition. Adeyemi (2017). It is a measure of the duration for which

the facility has been functioning or the organization has been active. According to Victoria Duff

(2017), a small business has a choice of two goals: increase profits but stay small or grows it

10
a longer business. You can devote time and effort creating a strategic plan that will help you

achieve the goal you want, but the implement it is what makes as strategy work.

Years in business refers to the length of time that a business has been operating. It is

often used as a measure of success, as businesses that have been in operation for a longer

period of time are seen as more likely to be successful. Bakery can obtain information about

what customers want, improve production operations and minimize delays in the supply chain

Anatan, (2018). Strategy is the direction and scope of an organization over the long-

term which achieves advantage in changing through its configuration of resources and

competences with the aim of fulfilling stakeholders’ expectations. According to Selvan S.

et al., (2021) Every year, bakeries diversify their offerings of goods and services in an effort to

better serve the requirements and desires of their clientele. Since they have been there for

millennia, bakeries have drawn customers from a wide range of ages, genders.

socioeconomic levels, and cultures.

Location

A strategic business location that is close to the target market is one of the factors that

researchers believe can influence consumer purchasing decisions. This close location will

make consumers decide to purchase, be satisfied, and communicate with other consumers to

encourage enthusiastic other consumers to share purchasing decisions with producers who

have sales points in strategic locations. Sudirjo. et al., (2024) For running a bakery business, a

good location is an important criterion. According to the article of Smith (2017), the business's

location is the key to successful operations and overall growth. When choosing the location,

consider the business needs, customers, employees and equipment needed to complete and

provide good customer-services.

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 You should ensure that the location of your bakery setup has good growth

potential. They could also have good demand for a variety of bakery products

compared to an industrial zone. So you need to analyze the growth potential of the

location you have chosen, 10 to 20 years down the line. Griffin (2017) stated that the

first course of action in finding a location for a business is to determine the business’

needs. The best location is one that minimizes costs while maximizing income. Some

businesses are “footloose” in that they could set up pretty much anywhere. Naglova Z.

& Horakova T. (2017). According to them, bakery industry is one of the key sectors

within the production of food products; however, there is a decrease of staff and lack of

interest in studying or doing business in this branch, which is consistent with below-

average wage. If the location is not flexible enough and does not support your long-term

goals, it is advisable to move on to a better one.

The location for your bakery should always be selected by keeping in mind the budget

that your wallet provides you. You can always change the location to a higher profile area

once your business starts generating good returns. Passini, A. et al., (2019). The most

important generation, according to research into cleaner production choices for a small

bakery, is organic material, which originates in the baked goods made in Bakery X. The

location of your bakery setup should be decided considering the demographics that

you want to attract. Rifna E. Jerome, et.al. (2019) Bakery goods are widely eaten by

people of all ages across the world because of their delicious taste and digestibility. A

business location strategy is a plan used to find the best location for your business to

reach its goals and objectives. Business location analysis is a process wherein

businesses compare different location characteristics in order to select the location

best suited to your business.

12
Types of Business Ownership

Private owners (both foreign and local) are better able to employ aggressive

actions to grow their business than state owners; firms with multiple owners (especially

international joint ventures) are less able to implement actions that drive business

growth than full ownership. (Chen 2016) arguing that ownership type plays an

important role in the effectiveness of action aggressiveness in driving business growth.

Business ownership refers to the legal and financial control over a business

entity. Small business ownership has been an important tool for many Americans to

attain economic freedom, but debt and equity capital, land, licensing, and other

business supports have not historically been equitably distributed, especially for

communities of color. Woodstock Institute (2017). The concept of business ownership

has evolved over time, reflecting changing economic and social landscapes. Hundreds

of years ago, businesses were often owned and controlled by individuals or families,

with limited legal frameworks governing ownership rights. Small businesses have also

built generational wealth for families. Klein (2017).

Best practices for business ownership encompass a wide range of strategies

and approaches that can help business owners effectively manage and grow their

businesses. Pofeldt (2018), raising your prices takes courage, but it’s often the only

way to grow revenue when you’re a freelancer, solopreneur, or running a small service

business. A unique and viable concept or idea forms the foundation of any business.

Zahorsky (2018), the pricing strategy of your small business can ultimately determine

your fate. Small business owners can ensure profitability and longevity by paying close

attention to their pricing strategy.

13
 Communication strategies are influential in determining what to offer and to

whom. Small-business owners need to search for new, creative ways to accomplish

many tasks at limited costs due to limited financial means, as well as time constraints.

Therefore, small-business owners are increasingly using social media as a platform for

their marketing, advertising, and recruitment activities as well as general

communications with employees, customers, and network partners (Schaupp &

Bélanger, 2014). Developing and implementing strategic and operational business

plans enable owners to position their businesses to outperform competitors when faced

with conflicting demands and limited resources (Cordeiro, 2013; Parnell, 2013).

Business leaders can achieve a higher rate of sustainability by focusing on strengths,

weaknesses, opportunities, and threats (Mirzakhani, Parsaamal, & Golzar, 2014).

Business ownership refers to the legal and financial structure through which individuals

or groups acquire and operate businesses.

Activity Based Costing (ABC)

Mostly used in the bakeries industry since it enhances the reliability of cost data, hence

producing nearly true costs and better classifying the costs incurred by the company during its

production process. According to Niewyk DL, Nicosia FR (2016). A consumer's behaviour has

traditionally been defined as a basket of options consisting of activities through which people

obtain, consume and offer products and services. Without proper planning, business

enterprises significantly impact controlling costs, operations, and decisions. This costing

system is used in target costing, product costing, product line profitability analysis, customer

profitability analysis, and service pricing. Trattner, A. et al., (2018). According to them,

Production cycles are a viable scheduling strategy for increasing the production

performance in the baking industry, particularly for small to medium-sized firms,

14
according to research on the topic Product Wheels for Scheduling in the Baking

Industry.

ABC (Alternative Business Data) has significantly improved cost management

systems in manufacturing organizations, leading to cost savings and strategic

applications in cost reduction initiatives, customer profitability analysis, process

optimization, product design, sourcing decisions, pricing, and product mix

considerations (Al-Sayed and Dugdale (2016). This information can enhance business

performance, protect against turbulent environments, and boost survival and growth

chances. Dubihlela, N. and Rundora, T. (2014).

One condition that makes companies good candidates for applying ABC is a

diversity of resource consumption, where product and resource consumption are not

correlated with traditional cost allocation methods Zemke D. (2016). Costing method

capable of overcoming the limitations of traditional costing systems in face of economic

and technological developments, namely, the arbitrary and imprecise allocation of

indirect costs from distortions in the imputation criteria. ABC to capture true costs and

to enhance the value chain of their operations. Sadderman, (2015)

In the current context, the development of an adequate costing system is of

extreme importance in organization because they feel the need to properly manage the

resources at their disposal and control their costs to achieve efficient and effective

management. Aina Nandini et.al. (2017) The purpose of this study was to evaluate a

Bekasi-based bakery based on how its customers felt about the quality of its products

and services. The bakery should place special emphasis on those metrics for

development. Cunha Moura (2016) The goal of this research was to learn more about

15
bakery customers' habits and the factors that influence their purchasing decisions. In

this case, the survey was split into two parts.

Target Costing (TC)

Target costing is a cost accounting system that provides management with

information to enable management to monitor the progress achieved in reducing

product costs towards predetermined costing targets. Johan ET & Muanas, (2014).

Target costing is a technique for planning production costs so that a product. Strategic

Management is to focus your goals in your business target and develop an action plan

to reach them. This involves reviewing your daily operations and asking where your

business is headed and what it should be priorities. Szopik, (2016). Competitive

strategy was based on emphasis on finding ways to reduce costs, emphasis on using

innovative methods and technologies to create superior products, targeting a clearly

identified segment, emphasis on building strong brand identification and emphasis on

price competition.

The concept of strategies has been used in this research with reference to the

future ability of a business to operate ethically and contribute to economic development

while improving the quality of life for its workforce, the local and global community as

well as future generations. Yusuf & Dansu (2016). Target costing is a method of

determining production costs in advance to produce a product to reduce costs in

achieving market prices and obtaining the desired profit. Juliani, (2019). Involves

setting a price for a product or service based on the costs associated with making it

and the desired profit margin. In target costing, all things are planned around a specific

price point.

16
 Method of costing, but rather a management technique wherein prices are

determined by market conditions. Virender Khanna (2016), We place a high value on

bakery goods because of their widespread usage and importance in Indian culture.

Due to their convenience and excellent nutritional content, bakery goods are rapidly

rising in Marketing to existing customers is a much greater opportunity than to spend

time and money to try to reach new customers. Kampouri (2017). Pricing strategy that

involves setting a price for a product or service based on the costs associated with

making it and the desired profit margin. In target costing, all things are planned around

a specific price point.

Target costing is a strategy that companies can use to plan the prices of their

new products before they manufacture them. According to Stephen Kyle (2013), in the

bakery industry to have a long-life business, marketing strategy is not enough selecting

the right employees is a must. It is important to ensure that the employees especially

the manager have an experience and have strong administrative skills including

managing costs, its staff and production schedules. Learning about how target costing

works can help you determine if it's the right solution for you and your business needs.

Life Cycle Costing (LCC)

Life cycle costing strongly affects competitive advantage; and Target costing

does not affect competitive advantage strongly. The study concluded that strategic cost

management is a strong influence on competitive advantage. Digbole E. (2023). Life

Cycle Cost Analysis can be performed on large and small buildings or on isolated

building systems. According to Illieska (2016), customers choose products based on

their unique needs and preferences. Life cycle costing provides an estimate of the cost

that an asset will incur in its lifetime.

17
 These costs include the initial investment, future additional investments,

annually recurring costs, and salvage or disposal costs. According to Gumaste R, et.al

(2021). This study is about entrepreneurship focusing on the bakery business as one of

the primary sources of income from entrepreneurs. According to Muhammad Ami.

(2018). Bakery is an example of an SME that expands its business by using the digital

market. Managing the life cycle of the assets helps to expand their ability to serve for

as long as possible. The information collected about the assets allows systems to

better understand at what point in the asset’s life it currently stands, which increases

system efficiency and Level of Service.

Life cycle costing, or whole-life costing, is the process of estimating how much

money you will spend on an asset over the course of its useful life. Whole-life costing

covers an asset’s costs from the time you purchase it to the time you get rid of it.

Romero Galarza et. Al, (2017). According to them, the business sector represents one

of the fundamental axes in the economy of a country. The study examined suggested

strategic moves for small businesses in the bakery manufacturing industry that can

ease entrance and consolidation into the target market segment as well as potential

avenues for market expansion. Kapyrin. (2021).

Review Related Studies

Foreign Literature

Bakeries performance is something that is created by a company at a certain

time or period by referring to the specific standards. Business performance refers to

how well a company is directed towards the market and its financial goals. Rahmasari,

(2018). According to Victoria Duff (2017), a small business has a choice of two goals:
18
increase profits but stay small or grows it a longer business. You can devote time and

effort creating a strategic plan that will help you achieve the goal you want, but the

implement it is what makes as strategy work. The solution might be managing your

company using the elements of strategic planning in a longer-term, day-to-day effort.

(Mintzberg 2015), stated the small business owner must be able to entrepreneur (age,

education, experience, willingness to work and ability to deal with customers and

employees). Also discussed were the planning ability of the entrepreneur.

Cravens et.al (2017) with reference to Cooper define three types of small firms.

Differing in organizational goals and missions, each organizational type is involved in

different strategic situation. According to Illieska (2016), customers choose products

based on their unique needs and preferences. They assess specific features

concerning the overall qualities of a product or service, influencing their decision-

making process. The affordability of a product or service emerges as a key component

in ensuring customer satisfaction. Chen & Wang, (2021).

According to (Porter 2018) competitive advantage as the ability of adding value

in the eyes of customers. meaning the value perceived might the superior than the sum

of the amount of cost related to the production processes. Another example is the

financial aid within the deterioration of the backward production facilities and capacity

and another factors, will directly affect business performance (Albert Humphrey).

Thereby, the strategy analysis tools play the very important role during the strategy

analysis choosing implantation. (Mintzberg 2019), stated the small business owners

must be able to change within their organization. (Castrogiovanni 2015), explored the

impact that planning has on the survival or success of firms.

19
 According to (Schindenhute and Morris 2016), also add that the necessity for

strategic behaviour depends on two factors: characteristics of the firm and the type of

entrepreneur involved. Strategic management in mom and pops would be difficult to

imagine indeed. The first one is founded on the dominant paradigm of the 80's which

was focused on the environment. Based on the Porter's positioning school it is also

referred to as outside in approach (Stonehouse and Pemberton, 2017).

In actuality, goods perform as the company's most crucial and obvious initial

points of contact with customers, or end users. For customers, a product's physical

qualities serve as psychological representations of their goals, aspirations, and tactical

trajectories. In other words, it is highly probable that buyers will create opinions and

viewpoints on the entrepreneur. There is a proper criterion of choosing any product that

could benefit you and your business in both present and future. Burr (2019).

The biggest mistake bakery owners make is relying on diverse information on

the internet to market their bakery. Of course, it’s great to have information, but the

best way to market the bakery is by collecting data from every single customer who

walks through the door, and then market to them. Marketing to existing customers is a

much greater opportunity than to spend time and money to try to reach new customers.

Kampouri (2017).

We should keep a detailed record of our business as it is considered as a key of

success for any business. By doing so, we will know where the business stands

financially and what potential challenges we could be facing. Just knowing this gives us

time to create strategies to overcome those challenges. The physical record exists as a

backup but more often than not, it is used to ensure that the other information is

correct. Hennart (2019). Despite their exquisite efforts, they did not deliver the value

20
we had hoped for. They were essentially issues searching for answers. They require

answers to issues that actually exist. Now, they make an effort to always design

solutions for challenges that clients explicitly describe. Hannan (2018).

Mbindo E. M (2016) Bakeries are crucial for employment and wealth creation,

but their production systems face challenges such as temperature, pH, water activity,

and bacterial contaminations. This research aimed to determine the effect of retail

bakery design on operational performance in supermarket bakeries in Nairobi County.

The study found that most bakeries had batch processes, and retail bakery design

improved operational performance. The study recommends retail bakery design over

mass and continuous production for flexibility, quality, and speed, increasing customer

satisfaction and firm competitiveness.

National Literature

The bread and bakery sector in the Philippines has been developing recently as

an outcome of the rising population and a growing preference for quick-to-prepare

foods. Additionally, driving the market are rising consumer income levels and the need

for bread and bakery goods. The Philippines bakery product market is expected to

grow at the highest rate in the coming years. The market is mainly driven by changing

lifestyles, rising income levels, and expanding population. The health risks connected

to the consumption of bread and bakery goods, however, are predicted to impede

market expansion. Nevertheless, opportunities for the development of nutritious bread

and bakery products in the nation were generated by customers' rising health

consciousness. Business World (2018)

According to Cabrera (2015), management accounting is the process of

applying appropriate methodologies. and concepts to economic data in order to help

21
management create plans for legitimate economic goals and make wise decisions with

a view to achieving these goals. The author went on to explain that management

accounting is a process of gathering, analyzing, preparing. communicating, and

identifying financial data that is utilized by management to plan, assess, and regulate

operations inside a company. The creation of financial reports for non-management

parties, including shareholders, creditors, regulatory bodies, and tax authorities, is also

included.

According to Manny (March 23, 2008), in every company, the location is being

considered as a must whereas production undergoes and because location is one of

the key for the business to succeed. One of the bakery business in Manila the French

Baker, aside from offering a fresh and delicious breads, one of its marketing strategy is

it offers a free use of WIFI and charging stations for laptops and mobile phones so

customers tend not just to buy breads but to stay and order again and again. This

marketing strategy is effective on attracting customers. Stephen Kyle (2013), in the

bakery industry to have a long life business, marketing strategy is not enough selecting

the right employees is a must. Whether it is a small or a big bakery it is important to

select a highly-skilled and flexible bread baker with creativity freedom is needed.

According to Benjamin (2017). When they are, the margins and profits are

potentially high your employees are the face of the bakery to your customer and

employees are one of the many problems encountered in bakery business models.

Operations and cleanliness, financial management processes. Some people care

about the quality of the products, but too many give in to the time pressure they are

under and no longer care about quality at all, their only aims is to work fast. This then

leads to tensions between staff.

22
 Customers are drawn in large part by aesthetics and texture. People are

frequently prepared to pay extra for aesthetically pleasing goods, and diverse textures

can satisfy a variety of tastes. It is crucial for food items that cater to dietary

constraints, including vegan or gluten-free options. Harvest Food Solutions, (2023).

Customer complaints, on the other hand, Patel et al. (2019) emphasized that

these complaints are indicators of low customer satisfaction which became the reason

why people don’t patronize a business establishment. Business owners must ensure

that these complaints are addressed, monitor, and maintain good services to

customers. This is because satisfactory complaint resolution is a very important factor

for continued customer retention or patronization Narayan et, al. (2021).

While a study conducted by Woods M. Thornsbury (2009) reveals that

opportunities in the Philippine market are present in the bakery and food service sector,

in contrast to many other Asian economies, bakery products have a well- established

presence in the Philippine diet. Trends in the bakery industry include; increasing

though somewhat slower sales of bakery products in 2008, continued importance of

artisanal bakery items marketed through local bakeshops and sari- sari stores; single

serve cakes and desserts that allow cost conscious consumers to indulge in dessert

items; and healthier product offerings that capitalize on increased awareness of the

attributes of some products.

Cappelli, A. et, al. (2021). A systematic review of innovations and improvement

strategies to boost sustainability, productivity, and product quality was done in the

study Challenges and Opportunities in Wheat Flour, Pasta, Bread, and Bakery Product

Production Chains. Sustainability and came to the conclusion that, despite the need for

additional research, this review offered a number of innovations and enhancement

23
techniques that used the "from cradle to grave" method and were successful in raising

the sustainability, productivity, and final quality of flour, semolina, pasta, bread, and

bakery products. Gumaste R, Shende K, Shah GPH (2021). This study is about

entrepreneurship focusing on the bakery business as one of the primary sources of

income from entrepreneurs. A bakery is one example of a business enterprise. A

commercial bakery produces food in large amounts and directly sells it to consumers.

Understanding consumer behavior helps firms better understand their client’s

requirements and wants. Businesses may improve customer service, develop new

products and services, and develop more successful marketing tactics by getting to

know their customers. Knowing consumer behavior also enables companies to foresee

emerging trends and better serve their clientele. Also, firms may cut waste and boost

revenue by better understanding consumer behavior. There are several key reasons

why understanding consumer behavior is important, including the ability to increase

sales, set prices, promote sales, aid in competition analysis, forecasting, target and

segment audiences, and create product portfolios. (Nature and Importance of

Consumer Behavior, (2019.) The book on Philippine breads, Jenny Orillos and Amy Uy

(2012) states that they were treated to a glimpse of the state of the baking industry in

the country at the Bakery Fair, a three-day event held at the World Trade Center from

January 30 to February 1.

Local Literature

Local bakery business into a successful one’ includes a variety of topics to be

covered, starting from an introduction of the business, background of the case study

company and as well as overall how bakery business in local has established over the

past years. We will also cover the business opportunities for new growing businesses

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and study how they will handle the competition around them. The objectives,

economics of business and purpose of statement will be defined to cover all aspects of

turning a bakery business into a success. Basley (2007).

According to Benjamin (2017). When they are, the margins and profits are

potentially high your employees are the face of the bakery to your customer and

employees are one of the many problems encountered in bakery business models.

Operations and cleanliness, financial management processes. Some people care

about the quality of the products, but too many give in to the time pressure they are

under and no longer care about quality at all, their only aims is to work fast. This then

leads to tensions between staff.

According to Dalangin, et al. (2021), consumers find social media influencers to

be effective in influencing their purchase intentions because, in their eyes, these

influencers are attractive enough to evoke a sense of familiarity with their audience,

trustworthy enough to convey facts about a product, and honest enough about what it

offers. Because the majority of viewers and customers from these groups follow and

support reputable influencers, age and sex are also significant factors. Additionally, the

relationship between a product and its influencer may be quite successful, particularly if

customers purchase a product because a well-known influencer uses it.

Garcia (2020) entitled, “Understanding Customer Satisfaction in Evolving

Markets” found that it’s crucial to know that the absence of complaints does not

indicate a high level of customer satisfaction. This highlights the complex nature of

customer satisfaction in the dynamic context of the evolving baking industry. That’s why

bakers and bakeshop owners ensure that the level of customer satisfaction is high to

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have a progressive business. It is because dealing with customers is the key to the

business success. Wang, (2016).

According to Janice Kho (2015), in terms of facilities, it is very important to have

a good one to make the customers feel comfortable and convenient and a high quality

of equipment's are important to ensure that products are safe and the production will

run softly and to avoid delays. According to Janice Kho, manager of the Jo-Ann's

Bakeshop, that the business helps generate employees and also helps resellers. The

interviewee also states that the business gives the government source of taxes. In

terms of social responsibility, the business has a housing project to help their

employees. The business also using a food grid biodegradable packaging materials

(MRF).

According to Wilfredo "Bing" Royeca (2016), the owner of Rolee Bakeshop, in

terms of handling employees and staff, the Rolee Bakeshop consider its employees as

a family member than just a plain employee so that the bakeshop will firmly succeed.

Rolee Bakeshop made them feel that whatever success it reaps is all because of team

work, because of the individual contribution of each member.

Analiza E. Rivas, et. al (2023). The findings revealed that the respondents buy

bakery products in the two bakeries chosen by the researchers. The demographic

profiles of customers in Madelicious Bakeshop and Antig Bakery reveal interesting

insights into their customer bases. Both bakeries cater to diverse groups in terms of

relationship status, educational attainment, and employment status. Both Madelicious

Bakeshop and Antig Bakery exhibit satisfactory customer satisfaction levels. The

findings emphasize the importance of product quality, pricing, and customer loyalty in

the bakery business. The level of satisfaction of the respondents who buy bread is an

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important factor in the bakery’s progress. The researchers found that there is no

significant relationship between the level of satisfaction across variables.

According to Mintel (2007). Cakes and Pies Report, approximately 63 percent of

people who eat cakes and/or pies would like to see healthier versions of those same

baked goods on the market. Specifically, respondents said they are most interested in

baked goods with low sugar, whole grain and zero grams’ trans-fat per serving. To put

this into perspective, consumers say they are willing to pay more. for bakery items with

healthier profiles. Consumers are savvier than ever about different fats, including trans

and saturated fats, and increasingly demand trans- fat free alternatives for the food

they enjoy.

According to Cabrera (2015), management accounting is the process of

applying appropriate methodologies. and concepts to economic data in order to help

management create plans for legitimate economic goals and make wise decisions with

a view to achieving these goals. The author went on to explain that management

accounting is a process of gathering, analyzing, preparing. communicating, and

identifying financial data that is utilized by management to plan, assess, and regulate

operations inside a company. The creation of financial reports for non-management

parties, including shareholders, creditors, regulatory bodies, and tax authorities, is also

included.

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 CHAPTER III

Methodology

This chapter presents the research design, the respondents of the study, locale

of the study, instruments of the study, data gathering procedures, sample and sampling

technique, statistical treatment.

Research design

This study will employ quantitative research design, specifically descriptive-

correlational design. It is a method of attempting to gather measurable information for

statistical treatment of the population sample. Research questions used by the

researchers were descriptive in nature, they were meant to identify responses that may

be associated with or correlated to a given variable whether that variable was

dependent or independent or moderating (Creswell, 2014). Quantitative research as

the process of collecting and analyzing numerical data to describe, predict, or control

variables of interest (Adedoyin, 2020). The quantitative analysis approach was used to

identify the perceived relationship between the independent – Strategic Cost

Management and dependent variable – Business Performance.

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 Locale of the study

The study was conducted in bakeries within Koronadal City.

Source:https://www.google.com/maps/place/Koronadal+City,+South+Cotabato

Figure 2. Map of Koronadal City

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 Respondents of the study

The respondents of the study involve thirty-eight (38) bakeries in Koronadal City,

with the managers and owners as the respondents. The respondents of the study

should be registered bakeries in Koronadal City.

Sampling Technique

For the sampling technique, the study utilized a purposive sampling. It is

process in which subjects are selected by the researcher to meet a specific purpose.

The purposive sampling technique is a type of non-probability sampling that is most

effective when one needs to study a certain cultural domain with knowledgeable

experts within. Choosing the purposive sample is fundamental to the quality of data

gathered; thus, reliability and competence of the informant must be ensured (Tongco,

M. D., 2007). The purposive sampling technique is a deliberate choice of a participant

due to the qualities the participant possesses.

The researcher decides what need to be known and sets out to find people who

can and are willing to provide the information by virtue of knowledge or experience

(Bernard, H. R., 2002). Snowball or chain-referral sampling method was also used in

conducting the study, wherein the respondents are asked to assist the researchers in

identifying other potential respondents.

This method is acceptable provided that the topic is not sensitive or personal. This

sampling method involves a primary data source nominating other potential data

source that will be able to participate in the research studies until the researchers has

enough data to analyze and draw conclusions

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Data Gathering Instrument

The study utilized self-developed survey questionnaire as the instrument of the

study to gather the needed data in a form of Likert scale, close-ended questions to

measure the needed data. The respondents chose from a 4-point frequency scale (4)

Strongly Agree, (3) Agree, (2) Disagree, (1) Disagree. A 4-point Likert Scale is

commonly used to increase the response rate and response quality along with

reducing the respondents (Babakus and Mangold 1992).

Table 1. Rating Scale and Interpretation of the Respondent’s Answer

Scale Range of Means Verbal Description

4 3.26 - 4.00 Strongly Agree

3 2.56 - 3.25 Agree

2 1.76 - 2.50 Disagree

1 1.00 - 1.75 Strongly Disagree

Data Gathering Procedures

The researcher prepared an official correspondence address to set forth in this

study requesting permission to gather data to the owners of bakeries in Koronadal City

that was derived from the list provided by the Business Permits and Licensing Office of

the local government unit in Koronadal City.

The researchers administer some questionnaire to the respondents. The

researcher is personally giving the questionnaire to the respondents and will explain

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 clearly the purpose and objective of the conduct of study and state that the information

will be gathered with utmost confidentially to ensure the cooperation of the respondents

without hesitation to answer the questionnaire.

The answer of the respondents is recorded, tallied, analyzed and interpreted

through the data that we are collected and formulate the findings, conclusion and

recommendations.

Statistical Treatment

As soon as the researchers gathered the data, they were compiled, sorted,

organized and tabulated. They were subject to statistical treatment in order to

answer the questions proposed in the study. The statistical tools employed are the

following:

Statement of the problem 1. Percentage Frequency Distribution

This statistical treatment will be use to describe the demographic profile of the

respondents. It includes the No. of Years in Operation, Location and Types of Business

Ownership of the registered bakeries.

Statement of the problem 2. Pearson R Correlation

Pearson R Correlation will be use to determine the interrelationship among the

independent variables - activity-based costing, target costing, and life cycle costing, and the

dependent variable – business performance.

Statement of the problem 3. One-way ANOVA

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 One-way Anova or One-way Analysis of variances a hypothesis-testing technique in

statistic will be used to test the equality of two or more populations or treatment means by

examining the variances of samples that are taken.

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