It is not that difficult for $p^k \geq p$.
$$\varphi_1(p^k) = \sum_{d^2| p^k } \mu(d) \sigma(p^k/d^2) = \mu(1)\sigma(p^k) + \mu(p) \sigma(p^k/p^2) $$
$ \sigma(p^{k}) - \sigma(p^{k-2}) = (1 + p + \dots + p^{k-2} + p^{k - 1} + p^k) - (1 + p + \dots + p^{k-2}) = p^{k - 1} + p^k = p^k\prod_{p|p^k}(1 + 1/p) = \varphi_1(p^k)$. Therefore it suffices to prove that the right hand side is multiplicative.
This can be done as follows.
Let $n = ab$ where $(a,b) = 1$
$$\sum_{d^2|ab} \mu(ab) \sigma(ab/(d^2))$$
One can also split the divisor $d$ in to two relatively prime divisors $ d_a$ and $d_b$ such that $d_a|a$ and $d_b|b$. Then the sum becomes
$$\sum_{d_b^2 d_a^2|ab} \mu(ab) \sigma(ab/(d_a^2 d_b^2))$$
Fixing $d_b$ and summing over $d_a^2$ one can get the following result:
$$\sum_{d_b^2|b} \sum_{d_a^2|a}\mu(a) \mu(b) \sigma\bigg(\dfrac{a}{d_a^2}\bigg) \sigma\bigg(\dfrac{b}{d_b^2}\bigg)$$.
since $\mu$ and $\sigma$ are multiplicative. Finally you will get
$$ \varphi_1(ab) = \sum_{d_b^2|b}\mu(b)
\sigma\bigg(\dfrac{b}{d_b^2}\bigg)
\sum_{d_a^2|a}\mu(a) \sigma\bigg(\dfrac{a}{d_a^2}\bigg)$$
$$ \varphi_1(ab) =\varphi_1(a) \sum_{d_b^2|b}\mu(b)\sigma\bigg(\dfrac{b}{d_b^2}\bigg) = \varphi_1(a)\varphi_1(b)$$.
Hence the given equation is true.