Chapter One: Introduction

Chapter I

Introduction

Background of the study:

In recent years, Overseas Filipino Workers has become the prime export commodity of the country. OFWs have highly contributed to the economic growth of the country. Last 2005, remittances mounted to more than $12 billion from some eight million OFWs, according to Dr. Bernardo Villegas (2006), economist and researcher. Based on the 2006 Statistic Report of the Philippines Overseas Employment Administration (POEA), the total volume of OfWs/processed contracts increased by 1.4% to 1,221,417 from 1,204,862 in 2005. Today, an estimated 15 million OFWs are located in 167 countries. In addition, Economist Antonio Agcaoili Jr., believes the continued inflow of dollar remittances from OFWs will also boost the country’s tourism industry. Indeed, the huge number of Filipinos working or residing abroad provides a strong backbone to the Philippine economy and sustains the tourism industry in the Philippines.

According to Dr. Cielito F. Habito (2005), economist and former general of the National Economic and Development Authority, “OFW remittances bring a lot of purchasing power”, given this and the growing number of OFW beneficiaries, makes them an important target for advertisers and manufacturers. In fact, according to the Asian Development Bank (ADB) study, OFWs could save, invest, and used their money and still live comfortably. Given this, and the higher salaries, and disposable income of OFWs compared to the average employees in the Philippines who earn P350 as a minimum wage. With this in mind, an observable increase of advertisements in print, radio, and tv (traditional media), which presents OFWs as one of their target market.

Advertisements for telecommunication companies, food chains, and banks are geared not only on OFWs but also their families, thus, contributing to the increase of consumer spending in the country. In this information era, the media as a whole, not only advertising has obviously contributed in shaping individual’s decision-making. Advertisement through traditional media (print, radio and television) has reached out to the Filipino public regardless of their location and economic background. In the 2004 Media Atlas Survey on Media Consumption and Lifestyle of Greater Manila Consumer conducted by Synovate, a leading global market intelligence company, 60% of the residents from the Greater Manila Area read through advertisements in magazines and newspapers. On the other hand, 42% of the residents read the national newspapers on a daily basis. The majority of the Filipinos have undeniably patronized television with 97.5% viewership in 2006 (Nielsen Media Index). In fact, according to the survey conducted by Synovate, an average of 2.8 hours are spent in front of the television daily. Radio, has continued to be the second most popular form of traditional media, with 75.3 % (Nielsen Media Index) of the whole population tuning on both FM and AM stations.

The undeniable increase of media’s availability has contributed to the greater exposure of consumers to advertisements. Through continuous contact with the traditional media, consumer’s ways of thinking, deciding and behavior are affected by advertisements presented to them by the mediums they are exposed to. According to the Dependency Model of Mass Communication by Sandra Ball-Rokeach and Melvin DeFleur (1976), there are is an essential relationship amongst three variables: the audience, the media system and the larger social system. According to the theory, a person’s dependence on media for information is geared on meeting certain needs and achieving definite goals. But the person’s dependency on the media is influenced by two factors; first, the degree of dependency on a certain form of media depends on its ability to fulfill more of these needs, second, social stability may affect a person’s action towards revaluating the person’s decision and action. The theory also states that the person’s decisions may not be always strictly personal but factors like culture and social conditions may play a part in the process of identifying one’s needs.

Through the model, we are able to enumerate some of the effects of mass media in shaping the society. Media may help shape and influence the individual’s way of thinking; this involves attitude forming, agenda setting, and belief system and value clarification. Media may also be having an effect on a person’s emotion, media can create fear and anxiety or it may increase or decrease morale. In advertising, an ad may encourage consumers towards buying a certain product especially if the individual can personally relate with the ad. The emotional connection with an ad may drive one into action. An observable use of the idea of selflessness, sacrifice and love for their family are used in advertisements for the OFWs, a feeling that every OFW, regardless of their destination, can relate to. Unfortunately, advertisements for OFW families highlight luxurious life styles from branded clothes, high tech gadgets to real estate.

Given the situation in the Philippines, wherein there is high media consumption, production of advertisements geared on OFWs, and growing remittances of OFWs that lead to the increase of their purchasing power, the study aims to understand and analyze the impact of the advertisements to the OFWs prioritization, thinking, decision-making, behavior and action.

After having been said that an increasing number of advertisements are including OFWs as their target markets, use images, words and themes that they could relate to, there are also negative implications to this scenario. On the downside, OFW families are concentrated on products of status such as expensive furniture and designer bags, this is according to the Deputy Administrator Noriel Devanadera of the Overseas Workers Welfare Administration (OWWA). She added that the government should provide proper education for the OFW families to prevent their lavish lifestyles. In fact, the Department of Labor and Employment said that, “Based on consultation, many OFWs send their money to their families and other relatives who, most of the time become too dependent and won’t work anymore. In addition, an article from a website for OFWs, www.ofwguide.com, says that OFW families spend their money on furniture and other expensive but generally useless things.

Rationale:

This study aims to understand and analyze how OFWs and their families allot their income to meet their wants and needs. The group also hopes to find out how advertising affects their decision-making towards developing their buying habits.

The country’s economy is affected by the remittances of OFWs as evident to the strengthening of peso. With this knowledge, OFWs’ contribution is vital to the progress of the country as Overseas Filipino Contracts are one of the prime export commodities of the Philippines. So, throughout the years, there has been an increasing number of OFWs going out of the country to earn higher income. The group intends to find out how the current economic situation—the strengthening of peso, affect OFWs, primarily their allowance.

Traditional media, as a tool of communication, is accessible in almost everyone including the OFW market. Thus, as consumers, the group seeks to analyze media’s continuous impact on how we think, decide, and act. In doing so, it will help reevaluate media’s role in shaping consumers’ behavior, particularly their taste and preferences, especially of the sector that has shaped our country’s economy.

Significance of the Study:

Millions of Filipinos decide to work abroad in the hopes of earning more to support family needs. Professionals leave the country for the higher pay. Because of this, the country has experienced significant numbers of workers leaving the Philippines to work as domestic helpers, nurses, seamen, engineers, etc. Most of them spend years abroad without coming back to the country in order to send higher amount of money to their families left in the Philippines. This study is significant to Overseas Filipino Workers (OFWs) and their families because it serves as a tool in understanding how media in the field of advertising affects their buying habits as consumers. It would also allow them to personally assess their spending, thus, provide them with awareness to better allocate their budget and money saving. With advertising having been known to greatly influence them, some have opted to purchase luxurious items due to the impact of ads on them.

The study could also assist the government in organizing and providing programs that would further help OFWs in efficient spending. Manufacturers, in the same way could use this study as a basis in producing effective marketing approach that would cater to the needs and wants of the OFWs and their families. Through the analysis that the study would provide on what they usually purchase and why they choose to spend on it, manufacturers could come up with marketing strategies that could benefit both parties with lesser financial waste. The study could also help advertisers in producing ads (print, radio and TV) that would effectively respond to the needs and wants of OFWs.

The study could also serve as a breakthrough in communication studies that would benefit students from Miriam College. With the knowledge that they would gain from this study, they would realize that not only OFWs but also ordinary students like them and other people from all walks of life could be affected by the media especially in creating a mindset that determines their choices and decisions. Also, students from every department in Miriam College could link their specified fields in understanding how media, economy, psychology, etc. are interrelated with each other.

Scope and limitation:

The study focuses mainly on male and female OFWs ages 30-45 years old and those who have their own families. Therefore, it does not cover OFWs below the age range and those who do not have families of their own. Because of this, the finding is not applicable to the general OFWs.

The research is also done in the Philippines, thus, the participants are mostly the families (wife and children) of the OFWs. It also does not include OFW’s extended families (cousins, aunts and uncles, grandparents and other relatives) as participants to the research. Furthermore, the study only analyzes the buying habits of OFWs and their families. It does not cover other activities that OFWs are involved with that are not in conjunction with their buying habits.

The study explores advertisements that are conveyed through traditional media (TV, radio, print) as a factor that affects buying habits. It focuses on how messages from Ads through media affect their decision making in what to buy. And so, the research is limited on this factor alone even though various aspects result to their buying habits.

Statement of the Problem:

The research paper hopes to answer the problem: How does advertising affect the buying habits of OFWs?

Specific questions:

The research specifically aims the ff:

1. How much do OFWs earn? Is it enough to meet their needs?
2. What do OFWs prioritize most?
3. How do OFWs allocate their earnings?
4. How do Ads conveyed through traditional media affect decision-making of OFWs and their families?
5. How frequently OFWs shop? How they pay for purchased merchandise?