Effect of market differentiation on the business performance of cafe businesses

International Journal of Research Studies in Management
Divine Word College of San Jose Special Issue
2026 Volume 14 Issue 2

Available Online: 2 April 2026

Author/s:

Tenorio, Shiloh Mae D.*
Divine Word College of San Jose, Philippines (shilohtenorio85@gmail.com)

Balmes, Jhullia Vyen E.
Cuisia, John Kurt P.
Cruz, Misty Sophia R.
Francisco, Jowee Ann A.
Curammeng, Samuel B.
Monterey, Joshua Cedrick D.
Galay-Limos, Jenny A.

Abstract:

This study examined the effect of market differentiation on the business performance of café businesses in San Jose, Occidental Mindoro. The independent variable, market differentiation, was analyzed through four sub-variables: product uniqueness, pricing strategy, customer service, and location. The dependent variable, business performance, was measured using three sub-variables: business sales, market influence, and customer satisfaction. The study employed a descriptive-correlational research design. Data were collected from 305 customers and 10 staff/owners of three selected cafés—He Brews Café, Thirdy’s Café, and Coffee Break Café—using researcher-made questionnaires. Weighted mean was used to determine the extent of market differentiation and the level of business performance, while the Pearson product-moment correlation coefficient assessed the relationship between the variables. Findings indicated that the cafés exhibit a high level of market differentiation, with product uniqueness and customer service as the most influential factors. Business performance was generally high, with customer satisfaction and market influence showing the strongest positive effects, while business sales were moderately impacted. Correlation analysis revealed a significant relationship between market differentiation and overall business performance, demonstrating that cafés with more distinctive products, effective pricing strategies, quality service, and strategic locations tend to achieve better performance outcomes. This study highlights the critical role of market differentiation in enhancing café business performance. The results provide practical insights for café owners, employees, and future entrepreneurs, emphasizing that offering unique products, competitive pricing, exceptional service, and strategically located establishments can improve sales, increase market influence, and foster customer loyalty. These findings serve as a valuable reference for businesses aiming to strengthen their competitive position in the local market.

Keywords: market differentiation, business performance, café business, product uniqueness, business sales

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DOI: https://doi.org/10.5861/ijrsm.2026.26011

Cite this article:
Tenorio, S. M. D., Balmes, J. V. E., Cuisia, J. K. P., Cruz, M. S. R., Francisco, J. A. A., Curammeng, S. B., Monterey, J. C. D., & Galay-Limos, J. A. (2026). Effect of market differentiation on the business performance of cafe businesses. International Journal of Research Studies in Management, 14(2), 11-22. https://doi.org/10.5861/ijrsm.2026.26011

* Corresponding Author