Winchester 94's quality has been all over the place and it is hard to predict how an individual gun will shoot until you start shooting. I've seen a few that would do 1" with optics, closer to 2" is pretty good for most guys with iron sights. With other guns 3-4" groups even with glass on the rifle, 4-5" without is about as good as they will do.
It could be that that individual rifle is simply not capable of better. Or it could be a combination of several conditions. The weather, it may not like that type of ammo, try something else. I'd think you should be able to get accuracy down to 2-4" even with iron sights. The 1" Winchester's are out there, but they are not common. In my experience a your odd's of getting a great shooter are better with the Marlins.