THE EFFECTS OF THE DIFFERENT MARKETING STRATEGIES USED BY

APPLICATION-BASED MODES OF TRANSPORTATION ON STUDENTS OF THE TOP

FOUR SCHOOLS IN THE PHILIPPINES

A Thesis

Presented to

The Faculty of Arts and Letters

University of Santo Tomas, Sampaloc, Manila

In Partial Fulfillment of

The Requirements

For the Degree of

Bachelor of Arts in Legal Management

By

Ogayon, Julienne Celine G.

Servan, Arwin Paul T.

4LM2

May 2018
I. Introduction

In the daytime, Metro Manila is home to around 20 million people. Coming from different

points on the route to their workplaces, homes, schools and to one place to another based on their

desires. All this activity is a burden to a transport system that is awfully inadequate. The demands

for a safe and convenient mode of transportation has rapidly grown. With the conditions of trains

either stalling in between stations or suffering technical glitches; buses traveling tilted due to

overloaded passengers; and taxis being hailed by passengers which drivers asks to pay additional

fees. The allotted modes of transportation by the government is not enough to accommodate all

commuters – a problem of the transport officials that up to now cannot be elucidated with a

solution.

In almost all human activities, transportation is very essential. In considering that, Public

transportation through the years and up until now is continuously aggravating. The irritating

inconvenience of a Filipino’s daily travel by public transport in the Metro is vast. An apparent

hassle of transferring from one transportation vehicle to another, not to mention the duration

between the transfers and sometimes the lining ups which can add up to the span of travel time

that could cause delay to one’s essential time.

The lack of transportation modes is not only the problem of commuters, most commuters

are also stressed out about the city traffic in the Philippines, especially in Metro Manila. Traffic is

inevitable especially in cities because more and more cars are being bought by people. This may

be a result of a hassle in getting a ride in public transports especially on holidays, paydays, and

weekends because these days are the days where people are going out and going home more. A
large part of commuters are students which is why they are affected by the worsening traffic in the

country or in the city.

The heavy traffic in Metro Manila is not only caused by the lack of roads and alternate

routes or the jamming of public utility vehicles in the city. It is also caused by many factors such

as the lack and inconsistency or inefficiency of railway systems, overpopulated roads and

residents, ineffective traffic controls, and also the accidents caused by the reckless drivers on the

road.

Students specifically those who are studying around the University belt or popularly known

as the U-belt must have experienced heavy traffic in España Boulevard. España Boulevard is a

road in Manila City where students are mostly passing through to get to their university or school.

It has been known that España Boulevard is one of the most traffic or busiest road in the city

because aside from it being a flood prone area, most cars and public utility vehicles pass through

here in order to reach its destination.

Ordinary taxi cabs are chosen as alternative way of reaching different destination. With its

convenience and privacy it can reduce the burden of commuting. Apparently, the reputation of this

taxi cabs are dubious. Old models of taxi cabs contradicts its conveniency. When it’s air

conditioning is broken and/or the suspension of the car is bumpy, it can be very frustrating. With

numerous number of taxi cabs that has this reputation, it is definitely not your money’s worth.

Another problem is a usual scenario which passengers struggle to get a taxi cab and also commuters

have to endure the rejection of reluctant taxi drivers due to personal reasons.

That being the case, a new means for transportation is inevitable to at least decrease the

inconveniences of the prevailing transport systems in the Metro. By having a one tap booking
system from your mobile phones which will provide a service of transport that is not only

convenient but also efficient in dealing with traffic by using the mobile application Waze.

According to Rappler Philippines, “In the last couple of years, the Philippines has seen the

entry of app-based ride-hailing services that provide passengers with transport options at the touch

of a button. Uber and Grab are the best-known names in the industry, providing passengers with

their own cars simply by using their smartphones.” But criticisms cannot be avoided in this.

Due to the happenings or incidents around, especially the crimes being committed by

people, commuters are trying to find a safer, more convenient, yet inexpensive alternate modes of

transportation. Uber and Grab aim for that safe, convenient, yet inexpensive service. This is also a

reason why commuters in the country choose to book a private ride in their smartphones rather

than waiting on the side of the road for hours to get a ride home.

Grab and Uber are also called as TNVS or Transport Network Vehicle System. The TNVS

is referred to owners of private vehicles who provides transportation services or who operates

using the Uber and Grab applications.

UBER is an international transportation service that operates in approximately 655 cities

in 77 countries. Uber partners or drivers use their own private vehicle and uses the UBER

application in order to pick-up riders and drop them off their preferred destinations. Uber,

according to riders is a convenient and a safe mode of transportation compared to public

transportations. Uber, for drivers, provides them work with exceptional pays, also it is a

convenient, on-hand work especially for drivers who have their own private cars.
 GRAB on the other hand, is Southeast Asia’s leading transportation service application.

Just like Uber, Grab provides users or riders a private vehicle operated by the car owner, in just a

tap of a button. Private vehicle drivers pick-up their passengers, also through the application, and

drop them off in their designated drop off area.

Uber and Grab are not only the application-based modes of transportation in the

Philippines. Angkas has also made its name known to different commuters. Angkas is a

professional on-demand motorcycle taxi service that allows commuters to safely and conveniently

beat the traffic.

In the past years, Uber, Grab, and Angkas has been the option for application-based modes

of transportation. However, these modes of transportation has experience different struggles in the

legality of their service. Conflicts has arised with the way their following policy given from the

Land Transportation Franchising and Regulatory Board (LTFRB). Usually regards with license of

their business.

Ride-hailing services Grab and Uber are also considered Transportation Network

Companies (TNCs), based on new transport categories created by the government back in May

2015. Nevertheless, LTFRB released a Memorandum, which suspends the acceptance and

processing of application for Uber, Grab, and other ride-sharing services. Both Uber and Grab

experience suspension which made them pay fines that would let them continue their services.

Meanwhile, Angkas was considered illegal as of November 11, 2017. Riding on the law

based on Republic Act 4136 or the Land Transportation and Traffic code, which mandates all

vehicles to be registered and classified as public or private.

 Angkas could have been recognized in a relatively new category for transport network

vehicle service (TNVS) too, same as grab and uber. Unfortunately for motorcycle riders, the

Department of Transportation order which recognized TNVS (2015-011) only covers sedans,

Asian utility vehicles, Sports utility vehicles, vans, and other 4-wheelers.

With the problem of regulation with these application-based mode of transportation, the

researchers have only chose Grab and Uber as it was the only company that have pushed through

with their platforms. These TNCs has paid for their legal fines and their service is back to normal.

On the other hand, Angkas as it was declared illegal and will only be available upon the revision

R.A. 4136, was excluded by the researchers as part of Application-based modes of transportation.

The challenge for the researchers is to determine the which marketing strategies of

application-based modes of transportation affects the undergraduate students of the top four

schools in the Philippines. According to the QS World University Rankings, an annual publication

of University rankings by Quacquarelli Symonds, University of the Philippines, Ateneo de Manila

University, De La Salle University, and University of Santo Tomas are considered to be the top

four universities in the Philippines which made the researchers focus on these four as the target

population of this study.

II. Objectives of the Study

` One’s marketing strategy has a great impact on the success of the business. While

application-based modes of transportation are widely used nowadays, it has also been known to

use different marketing strategies to attract potential customers every day. These application-based

modes of transportation have been a popular preference by students in their daily use of
transportation. Thus, these marketing strategies are of great influence on the preference of the

students in using it as a mode of transportation.

This study aims:

❏ To determine if the different marketing strategies have an effect to students of the

top four universities of the Philippines

❏ To know the effects of the different marketing strategies of these application-based

modes of transportation.

❏ To know which of the different marketing strategies used by application-based

modes of transportation is the most effective.

❏ To analyze the advantages and disadvantages of such marketing strategies to the

students of the top four universities of the Philippines

III. Theoretical Framework

Marketing strategy is one of the functional strategies of the company which makes up the

overall business strategy. The marketing strategy of a business is very important, and its

organization is influenced by all the four elements of the marketing mix. The company must

constantly analyze its environment, evaluate the strategies employed by their competitors and

examine the marketing mix elements. A company can develop a marketing strategy only by

knowing exactly what the customers want, how much are they willing to pay for the good or

service, what distribution channels are most optimal and what support measures can give the best

results.
Marketing Mix 4 Ps

E. Jerome McCarthy, a marketing expert created the Marketing 4Ps in the 1960s and since

then, this classification has been used in the whole world. The Marketing 4Ps are the foundation

of the idea of marketing mix. This concept is used in teaching the basic marketing classes as by

understanding its basic concept, one shall achieve business success.

The first element of the marketing mix is Product. It is an item built or produced or the

service a company offers which satisfies the needs of a consumer. The product may either be

tangible or intangible. The next element is Price, which is basically the amount a customer pays to

enjoy the product. It is an important element of the marketing mix as it determines the firm’s profit

and survival. The third element is Place or Distribution which is the positioning of the product in

a place which is accessible to potential buyers. This element also comes with the importance of

determining your target market. Lastly, the element of promotion is a component of the marketing
mix which boosts brand recognition and sales. This element comprises different elements like

Sales Organization, Public Relations, Advertising and Sales Promotion.

Theory of Routine Mode Choice Decisions

The theory of routine mode choice decisions (Schneider, 2013) describes how people may

choose a travel mode for routine, non-work or school activities, such as shopping and other errands.

Schneider’s theory is also based on a number of psychological theories, including Triandis' (1977)

Theory of Interpersonal Behaviour (TIB), Theory of Planned Behavior, The Transtheoretical

Model of Behavioral Change, Naturalistic Decision-Making, and Comprehensive Action

Determination Model.

IV. Conceptual Framework or Research Paradigm

 Different marketing strategies are used by companies to gain profit. The relative role of

integrated marketing mix (advertising, price, product, and place) is vital to the success of the

organization that aims for growth, sustainability, and positive transformation. Thus, it involves

several socio-economic factors that affects consumer behavior which leads to customer satisfaction

and loyalty to the company.

The brand awareness strategy used by application-based modes of transportation is based

on the experience they give their customers and the value of what the customers is getting versus

how much they pay, in comparison with the common cab company as well us public vehicles. The

quality of experience from these application-based modes of transportation will stand out from the

competitors, more personal, on demand, and efficient approach to the car service industry.

In positioning application-based modes of transportation aim for a better overall experience

for the consumer. This experience will be achieved by providing vehicles that are in good condition

with no cosmetic damage and vehicle models from 2014 above only.

The experience and convenience shall be possible thru the user – friendly application. A

one tap booking system that gets you a ride in minutes. The application increases efficiency and

eliminates the hassle of hailing a cab. Through the application, these application-based modes of

transportation can provide consistent, high-quality service to their highly valued customers.

The affordability of these application-based modes of transportation shall be consistent. In

order to keep customers coming back and maintain customers’ level of satisfaction, the rate of

transportation will do away with their surge pricing tactics and maintain a consistent rate

depending on the location.

 Application-based modes of transportation will expand its operation in large cities.

Increasing number of drivers will decrease the wait times and be even more efficient for meeting

the customers’ needs. Reaching a larger number of consumers to satisfy the needs for

transportation at any given time.

Social media advertising, ads strategically placed on websites frequently visited and word

of mouth will make up most of application-based modes of transportation’s marketing

communication strategy. Facebook, Instagram, and Twitter will be the outlet on how they could

reach their consumers. Doing appropriate advertisements based on the website will be an efficient

advertising technique.

These are the marketing strategy used by Transport network vehicle service companies.

All of these strategies shall adapt to the needs of the consumer to promote the effectiveness and

efficiency of their services offered.

Undergraduate students of the top four universities in the Philippines are offered alternative

services by these application-based modes of transportation that are more accessible, safer,

affordable and convenient than what is usually provided by other modes of transportation. Once

their services provide these factors it will lead to consumer satisfaction and eventually make

consumer loyal to their service. The more people think of them as the modes of transportation that

can promote these factors shall grant a popularity that will lead to profit of the company.

V. Statement of the Problem

This study is aimed to find out the effects of the different marketing strategies of

application-based modes of transportation on students.

Especially, this study sought to answer the following questions:

 1. Do the different marketing strategies of application-based modes of transportation have an

effect on students?

 Does the Price of application-based modes of transportation have an effect on students?

 Does the Product of application-based modes of transportation have an effect on students?

 Does the Promotion of application-based modes of transportation have an effect on

students?

 Does the Place/Distribution of application-based modes of transportation have an effect on

students?

2. What are the different marketing strategies used by application-based modes of

transportation?

3. Which of the effects of the different marketing strategies of application-based modes of

transportation has the greatest effect on students?

4. What are the advantages and disadvantages of application-based modes of transportation

to students of the top four universities of the Philippines?

VI. Hypothesis

Null Hypothesis:

The different marketing strategies used by application-based modes of transportation does not have

an effect on students in choosing their mode of transportation.

 The Price of application-based modes of transportation does not have an effect on students.

 The Product of application-based modes of transportation does not have an effect on

students.

 The Promotion of application-based modes of transportation does not have an effect on

students.
  The Place/Distribution of application-based modes of transportation does not have an effect

on students.

Alternative Hypothesis:

The different marketing strategies used by application-based modes of transportation does have an

effect on students in choosing their mode of transportation.

 The Price of application-based modes of transportation does have an effect on students.

 The Product of application-based modes of transportation does have an effect on students.

 The Promotion of application-based modes of transportation does not have an effect on

students.

 The Place/Distribution of application-based modes of transportation does have an effect on

students.

VII. Significance of the Study

This study shall be beneficial to the following:

● Parents

To be able to help the parents of the millennials to better understand the preference of the youth

today when it comes to modes of transportation.

● Researchers

The researchers will be able to know and understand the different external factors that may be

affecting their own classmates as they may be able to help them by understanding their behavior

and give ways on how to be motivated in school.

● Application-Based Modes of Transportation Users

Students not only the ones who are subjects of this study, but every consumer who use application-

based modes of transportation may better understand their fellow consumer’s behavior towards

these

● Application-Based Modes of Transportation Companies (Uber and Grab)

Knowing how consumers are affected by the different marketing strategies they use will enable

them to further create plans that will help their companies gain more profit and attract more

consumers while making a stronger relationship with their existing consumers. This study shall

give Uber and Grab the privilege to have an accessible study which is directly aimed at their

consumers and their company’s behavior which came from a third-person surveyor.

VIII. Scope and Limitations

This study is will primarily cover the effect of the marketing strategies or the promotion of

the application-based modes of transportation companies among the top 4 universities in the

Philippines. According to the QS World University Ranking, the top 4 universities located in the

Philippines are the University of the Philippines, Ateneo de Manila University, De La Salle

University, and University of Santo Tomas.

The researchers have limited the target population to undergraduate college students of the

said top 4 universities above. The reason why the researchers limited the target population is that

they have presumed that most students from the graduate school are using privately owned vehicles

for their convenience in transportation, as this study is limited to those students who use public

transportation. Also, since the researchers chose undergraduate students from the top 4

universities, it is reasonable to limit the scope of location in Metro Manila only.

IX. Definition of Terms

Application-Based Modes of Transportation –

Ateneo De Manila University

De La Salle University

Grab

Marketing

Marketing Strategy

Quacquarelli Symonds

Uber

University of the Philippines

University of Santo Tomas