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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Cooperative is an association where group of people meet their common social economic and cultural needs and objectives with a fair and mutually-owned enterprise (International Cooperative Alliance, 2012). Through the years, cooperatives are considered as one factor to alleviate poverty towards development, whereas, Tomaquin (2014) stated that it is one of the Philippine government drivers towards rural development since it aims high for economic growth for both rural and urban settings.

According to Pellisery (2012), rural development is a process by which the efforts and unity of the people and the government authorities improve the cultural and social state of the rural communities integrating communities into the life of the nation and to enable each of one of them to meaningfully contribute to the national development. Establishing a cooperative in Barangay Makiling will serve as the first step to achieve rural development, but before involving the barangay Makiling residents in cooperative building, the residents must understand the function of cooperatives in the society, what are the principles that must be followed strictly in order to avoid conflicts and abusing the authority, rights and privileges of a cooperative. The residents are equivalent to customers. In a marketing perspective, the customers are the center of the universe (Clerck, 2011), whereas the residents must be the center of the attention or the priority. The residents will serve as the asset of a cooperative. Part of economic mainstream was considered as the active player of the society and in nation building. As the Philippine Star (2015) stated, the residents must have a prior knowledge or at least understand what cooperative is, what their principles are, all about and the cooperative laws in order to comply with legal requirements that all cooperatives must satisfy. It would be misleading to put them in the cooperative world if the residents do not understand it.

The objectives of a cooperative from Cooperative Development Authority (CDA) serve as a guide to the people who might be the possible assets or members of a cooperative. According to CDA (2017), the objectives of the cooperatives are (a) to provide its associates goods and services to attain bigger income, savings, investments, productivity and promotional power to endorse among themselves an equitable distribution of net surplus by maximizing utilization of economic scale, cost-sharing and risk-sharing; (b) to provide the best social and economic benefits to its members; (c) teaching efficient ways of doing things in a cooperative manner to its members; (d) spread cooperative practices and new ideas in business and management; (e) allowing less privileged and lower income groups to increase their ownership in the wealth of the nation; and (f) cooperation with the government, other cooperatives and people-oriented organizations to further the attainment of any of the foregoing objectives. These objectives of the Cooperative Development Authority in the Philippines will empower the social status and the way of living of the residents, build confidence, learn new ways of handling a business in a cooperative manner and will also drive them towards economic development. Given with these goals, this explains and gives any cooperative societies the ability to affect the members positively at household or in an enterprise level and will signifies an improvement in standard of living and better economic conditions of the participants (Oluyombo, 2012).

Another aspect that must be considered in providing information to the people is the types of cooperatives. In establishing a cooperative, it is necessary to educate the people about the different types of cooperatives because not all cooperatives have the same function, goals and vision so the idea will be stated clearly on the people's minds. Cooperatives may vary depending on the needs of the community or the members. There are many types of cooperatives in the Philippines that are registered under the Cooperative Development Authority (CDA). Some of the cooperatives hat will best fit the needs of Barangay Makiling are as follows: (1) Credit Cooperative, according to CDA (2017), this type of cooperative promotes and accepts savings and lending services, among its members. Providing financial assistance and other related financial service that generates a common group of funds to its members for productive and well-prepared purposes. The only sources of financial services to the community people in rural areas where commercial banks do not operate are the credit cooperatives (Paudel, 2011); (2) Service Cooperative, a cooperative that engages medical and dental care, transportation, hospitalization, insurance, labor, housing, electric light and power, professional, communication and other services; (3) Producers Cooperative, this type of cooperative undertakes a combined production of agricultural or industrial goods. The members forms and operate its production of raw materials into finished or processed products for sale by the members and non-members of a cooperative. For any end product that are sold in the name of or for the account of the cooperative, shall be considered as a product of the cooperative and its members (CDA, 2017); (4) Multi-Purpose Cooperative, this type of cooperative performs more than one function. It combines two or more business activities of different types of cooperative. According to Masicat (2014), from R.A 6938 Cooperative Code of the Philippines it is said that most of the registered multi-purpose cooperative undertakes four functions: marketing, credit, purchasing and mutual utilization of resources simultaneously.

It is also important to know the other scopes of the effect that cooperatives can bring in the lives of the people. Cooperatives in gender equality, the embodiment of women in economic and political decision making processes is low; distressing from lack of access to decent fair wage, safe employment and working in informal and unpaid labor. Knowing these facts, the United Nations Member States have approved to prioritize gender equality and women empowerment (ILO COOP, 2014).

Cooperative is an effective way to empower women, promote gender balance, improve socioeconomic and leadership development, cooperative management, financial management training, skill development and other activities that are carried out through different program at local, regional and national level. It also conducts an interaction program for empowering women with the participation of the representative of the cooperative and its stakeholders.

It can formulate code of conduct for committee members through the cooperative which is maintained ethical and financial discipline of their cooperatives; launching awareness programs for a cooperative in different districts regularly. These national cooperative runs agro-marketing for the equality production and marketing the products within and outside of the organization to realize the better price to the farmers to uplift the socio-economic condition of women. It can also select may other project such as the national cooperative bank, distribution of fertilizers, operation of cooperatives exhibition, supply of construction materials and the production of district cooperative unions through logical supports (Bastakoti, 2011).

 In food security, cooperatives give a big support by helping small farmers, livestock keepers, fisher folk, forest holders and other producers to solve numerous problems. Farming is where cooperative widely utilized business models. Cooperatives help the small agricultural producers to face challenges that often lack of access to information and remoteness affect the food prices and the international markets; variable costs of buying seeds and fertilizers, access to high-quality inputs and also the accessibility to loans to buy these inputs and lack of infrastructure and transportation in rural areas (Oemichen, 2011).

Cooperatives also provide knowledge and information for the rural residents. It helps them build their small producer's skill, that also help them to innovate and adapt to the changing markets. Importantly, cooperatives allow farmers' participation in the decision making processes and help to voice their concerns and interests that will increase their negotiating power to influence policy making processes, and lastly, to facilitate access to safe food (ILO COOP, 2015).

 In employment, one significant role of cooperatives is to create employment and income generation. According to ILO COOP (2015) there are more than 100 million jobs existing in cooperatives globally. With small and medium sized enterprises, cooperatives are the most important resources of new employment. But still, cooperatives need to improve in creating employment, available country evidence for this are quiet compelling. There are evidences found that employee in employee-owned businesses is. Recently, there is an evidence found that employment in an employee-owned businesses is not likely to have a negative affect the cyclical downturns and these businesses had greater levels of employment stability over the recent economic downturn (Birchall, 2013).

There is an increase in the form of evidence that suggest employee-owned businesses surpass economically in normal times compared with non-worker owned businesses that lead to more financial returns and greater productivity. In US, research has found a consistent and positive relationship between the labor productivity and employee-ownership. In the past research in different countries in the range of different sectors suggests that the employee owned businesses provide higher financial returns, in higher levels of employment stability and in greater productivity levels. Cooperatives also contributes to livelihoods and in the equitable growth that includes income security, strengthening farmers position in value chain, jobs for rural communities, employment in diverse sectors of economy, provision of infrastructure, spill-over effects to employment and other services, and social inclusion. Contribution of cooperatives is evident from around the world, it have made in providing income security and promoting decent work especially to those previously excluded (ILO COOP, 2015).

 Cooperatives promote stable and peaceful societies. Currently in the Philippines, there are a lot of social and political conflicts that are arising. Rooting from poverty, greed, misunderstandings and other conflicts resulting to crimes, as the result of violent and social conflicts, cooperatives are emerging as the sources of participation to empowerment, positive social capital, fostering a strong sense of community and inclusion among members, and restoring interpersonal relationships and peace. In the past where genocide in Rwanda had occurred, in addition to dealing with structural causes of criticisms, cooperatives provided emotional support for members seeking justice and in 1840's in the UK; cooperatives have been known to emerge as the collective response to crisis, like economic hardship (ILO COOP, 2015).

In 1860's in Germany, agricultural depression occurred followed by the great depression in US and the unemployment crisis in Europe in the 1970's, with these, do not mean that cooperatives only succeeded in times of crisis. However, in the times of crisis is where there is a great need to establish more solid financial and economic systems that cooperative societies are likely to re-emerge as the important solutions that are timely and durable. Cooperatives have the potential to renew struggling sectors of the country, it recovers crisis stricken local economies that increase returns to producers and service providers across the chain, it formalize informal employment and also generates employment for women and youth in both rural and urban areas. There are more forms of cooperatives that are formed to respond to different crises, for example, social care cooperative that are being formed in responding to the care needs of the ageing populations or care cooperatives formed to take care of orphans after earthquakes (Esim, 2013).

Provided with such information about the cooperatives perception of the barangay Makiling residents about it is important, through the resident's perception, it is essential in evaluation to be able to identify its significant worth and determining what might be the possible gaps that will affect the establishment of cooperatives in barangay Makiling. Before getting further to evaluation, it is important to know what perception is. In Marketing, perception of customers is a process by which a customer selects, organizes and interprets information/stimuli inputs to create meaningful picture of the brand or the product (MBASkool, 2011). Therefore relating to barangay Makiling's situation, the residents is equivalent to the customers where the perception of the residents is important in interpreting the role and importance of cooperatives to their lives. Perception in marketing is important because the consumers beliefs and what they feel about a product or business can be as important as what the product actually delivers in performance . With this reason, perception is important for marketer's to manipulate the perception of their products or businesses to create a positive image in the minds of the consumers (wiseGeek, 2017). It is also important in marketing that the business that tries to advertise or promote the enterprise finds a way to get the consumers to trust the business.  That is why, knowing the perception of the Barangay Makiling residents towards a cooperative will be essential in creating a marketing strategies. With this thought, marketing is all about creating an image of the products or the business that will be delivered to consumers in the most concise and intelligible manner possible (wiseGeek, 2017). Where in establishing and marketing the cooperative in barangay Makiling strategies will be formulated and planned depending on how they perceive the cooperative in able to manipulate the image of the potential cooperative for barangay Makiling.

As the perceptions of barangay Makiling residents towards a cooperative are identified, the next step will be the evaluation. According to (Business Dictionary, 2017), evaluation is a difficult analysis of completed or on-going activities that determine or support management, effectiveness, accountability, and efficiency. Evaluation in marketing is important because it also handles the process on which determines the effectives of a business strategy (Lohrey, 2017). It is a way to determine how to assess the establishment of cooperatives in Barangay Makiling and identify what actions or strategies are necessary to bring performance back in line with the cooperatives objective.

Evaluating the perception of the residents will lead to recommendation of marketing strategies. According to (Business Dictionary, 2017), marketing strategy is an organizational strategy that combines all of the marketing goals into a plan. It is important to be able to create a plan for Barangay Makiling to successfully establish a cooperative within their community and to promote and increase the engagement of the people to a cooperative.

If people are educated about a cooperative, there is a bigger chance that people will acknowledged the establishment and marketing of a cooperative within the community. But before establishing, there must be a plan on how to do it. In line with marketing is strategic planning. First in strategic planning is to have an analysis of the market and its internal and external factors that are affecting the action. The analysis that will best fit in identifying the gaps of establishing a cooperative will be strength, weakness, opportunities, threat analysis (SWOT). It is a business analysis technique that an organization can perform for each of its products, services and markets in the best way of achieving future growth (Team FME, 2013). According to Ommani (2011), a SWOT analysis can also help in gaining insights into the past and think of possible solutions to the existing or potential problems that is either for an existing business or for a new venture. This analysis is essential to create a basis for plans and for its future actions, especially a cooperative is considered as a new business venture for Barangay Makiling for the benefits of its residents aiming to achieve development.

 In strategizing in building a cooperative in Barangay Makiling, another factor that must be considered is the perception of the people towards the role of cooperative. Perception is important to know how the people feels about, and with this, there will be a good insights of what may lack. Knowing the perception is important in manipulating a positive image of businesses in people's minds. Because not everything about cooperatives is good, sometimes cooperatives are used as a way for illegal actions. It is also important to know what cooperative are because a new cooperative is a new business and first impression lasts.

According to wiseGeek (2017), one of the essential aspects in marketing that are considered is the first impression of the people because it often dictates how the consumer will feel about a certain product or service or even towards a person and if that chance is wasted, a cooperative may not have another chance to reel those people in to the fold. The more people that are encouraged to join a cooperative, the more chances of establishing a cooperative. By establishing a cooperative one step towards rural development will be achieved.

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