Republic of the Philippines

NUEVA VIZCAYA STATE UNIVERSITY

Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

College: Teacher Education

Campus : Bayombong Campus

DEGREE BTLE COURSE HE 4

PROGRAM NO.
SPECIALIZATION HE COURSE Consumer Education
TITLE
YEAR LEVEL 3 TIME FRAME 9hrs WK 1-3 IM 1
NO. NO.

I. UNIT TITLE/CHAPTER TITLE: Economics and You

II. LESSON TITLE :Consumer in the Marketplace

III. LESSON OVERVIEW

Economics is a social science concerned with the production, distribution, and

consumption of goods and services. Economics affects our daily lives in both obvious
and subtle ways. From an individual perspective, economics frames many choices we
have to make about work, leisure, consumption and how much to save. Our lives are
also influenced by macro-economic trends, such as inflation, interest rates
and economic growth.

IV. DESIRED LEARNING OUTCOMES

At the end of the chapter, the students should be able to:

a. Discuss the consumer in the marketplace and its characteristics
b. Discuss factors affecting consumer behavior
c. Differentiate needs and wants

V. LESSON CONTENT

Consumer in the marketplace

The consumer market pertains to buyers who purchase goods and services for

consumption rather than resale. However, not all consumers are alike in their tastes,
preferences and buying habits due to different characteristics that can distinguish
certain consumers from others.

Benefit of Studying Consumer Behavior

If you sell goods and services for individual use, it’s likely that you sell directly to the
consumer market. Unlike the business market, the consumer market makes purchases for
their own use, not for resale. Learn to define the consumer market for your business and
understand when you need to segment the market. This will help you to reach your
consumers more effectively.

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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

Understanding the Characteristics of Consumer Markets

Consumers have different likes, dislikes and needs which are affected by four main
characteristics: demographic, behavioristic, psychographic and geographic. These aspects
affect what kinds of products consumers are more likely to buy and which brands they are
more likely to be loyal to.

 Demographic: This includes age, gender, family status, occupation, income,

education, ethnicity, religion, sexual orientation, social class and nationality. This is
the foundation for understanding your target consumer.
 Behavioristic: This characteristic defines the way consumers behave towards
products. It includes benefits they are looking for, how often they plan to use the
product and how ready they are to make a purchase.
 Psychographic: It’s important to understand what kind of lifestyle your consumer
lives. This includes their activities and interests, their attitudes and their opinions. It
also covers their personal values.
 Geographic: This characteristic relates to where the consumer lives. It can include
the region or climate, as well as how densely their area is populated and how large
it is.

By understanding these four main characteristics of your consumer market, you can
become more familiar with what their needs are and how your business can meet them. Use
market research and focus groups to ascertain the characteristics of your target consumer
market.

Segmenting the Customer Market

In order to target your consumers effectively, it’s important to segment them to better
understand what they are looking for. Market segmentation helps your business to better
cater to consumer needs, allowing you to build brand loyalty and earn repeat customers.

Segmentation of the customer market can involve creating products designed

specifically for that subset of customers. For example, if your business makes hand-made
shoes for babies, a way to segment the market is to create shoes especially for premature
babies whose feet are smaller than newborns.

Market segmentation can also involve communicating the benefits of your products

differently to differing groups of consumers. The message can be tweaked to appeal to your
target, while the product can remain the same. For example, if the shoes are made with
recycled material, you can tout that as a main benefit to consumers who value
environmentally friendly business practices. However, for consumers who care more about
style, you can discuss the unique designs as the main benefit.

Reaching the Target Consumer Market for Your Business

Once you have a solid understanding of who your consumer market is and how you
can segment them to better appeal to their needs, it’s time to create a strategy to reach
them. How will your business share your benefits with your target market so that they will be
compelled to make a purchase?

The consumer in the marketplace is bombarded with marketing messages from

several different brands, many of which may be your competitors. In order to make your
marketing efforts stand out, it’s important to do your homework and carefully craft your
campaign:

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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

 Go where your consumers are: Target your marketing efforts where you will get the
most views. If your target market is seniors who are not web-savvy, don’t create a
social media marketing campaign, for example.
 Tailor your messaging: All consumers don’t have the same interests, so don’t try to
appeal to them with the same messaging. Be sure to carefully craft what you’re
going to say based on the interests and needs of your market segment.
 Measure your results and make a pivot: Always track your efforts to see whether or
not they are successful. Make small changes to reassess your campaign until you
find the results you’re looking for. 

The Difference between Customer Needs and Wants

Understanding the difference between a customer’s wants and needs is a major key to
succeeding in business. Often what a customer wants is diametrically opposed to what they
need. As a businessperson, your job is to give the customer what they want. Helping them to
understand what they need is also important. However, it’s not your responsibility to convince
customers to get what they need. Businesses make money by satisfying their customers.
Often it’s easier to sell them what they want than what the need. So that’s where
businesspeople should primarily focus their energy.

Buying versus Selling

Most people prefer to buy something rather than have it sold to them. There is a subtle
yet significant difference between the two. When people decide for themselves what they want
and go out and get it, they feel like they have bought it. On the other hand, if a salesperson
convinces them to purchase something, even if they need it, the customer may feel that it was
sold to them. It often makes them feel like the businessperson has seized the power in the
relationship. If you want customers to feel good about the relationship and are interested
in customer retention, you have to give them what they want.

What About Their Needs

Sometimes what a customer wants is not what they need. As a caring human being you
may feel it’s your responsibility to tell them as much. In that case the best you can do is share
the information you think they need to know but allow them to make what they feel is the right
decision without feeling pressured. Sometimes the customer will agree with you, change their
purchase, and thank you for your help. Other times they may completely disregard what you
say and still pursue what they want over what you know they need. Still, if you want to stay in
business you should be willing to sell them what they want without making them feel bad about
it.

Needs versus Wants

In sales, a need is something that solves a real or imagined problem. A want, on the
other hand, is simply something that would be nice to have. Often customers have no idea
what they need, they simply know what they want. When you give them what they want, in the
long run this enables you to build a lucrative ongoing relationship with them. One in which they
feel they’re in control.

Wants are More Powerful

What the customer wants is often more of a powerful motivator than what they need.
This becomes clear when you listen to your customer and ask them to tell you why they want
what they want. Usually they have a burning desire to get what they want and simply what you
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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

to show them how they can get it. Customers tend to get more value, joy, and satisfaction from
purchasing what they want versus what they need. Successful businesspeople understand this
and know how to use it to their advantage.

What This All Means

Businesspeople make their living satisfying consumers’ wants and needs. It becomes
clear very early in their careers that the average person is usually willing to spend more on
want they want than what they need. For example, if a homeowner needs a new roof, they
often look for the least expensive one that meets their needs. However, if they simply see a
particular type of roof they want, whether they need it or not, they are usually willing to pay
whatever it costs to get it. The purchase makes them feel good so price is not a barrier, as
long as they can afford it, to them getting it.

Understanding what your customer wants and giving it to them at a price they can afford
has made countless businesspeople successful. Plus it’s a lot easier to sell people what they
want than what they need.

Demand and Supply in Markets for Goods and Services

Demand for Goods and Services

Economists use the term demand to refer to the amount of some good or service
consumers are willing and able to purchase at each price. Demand is based on needs and
wants—a consumer may be able to differentiate between a need and a want, but from an
economist’s perspective they are the same thing. Demand is also based on ability to pay. If
you cannot pay for it, you have no effective demand.

What a buyer pays for a unit of the specific good or service is called price. The total
number of units purchased at that price is called the quantity demanded. A rise in price of a
good or service almost always decreases the quantity demanded of that good or service.
Conversely, a fall in price will increase the quantity demanded. When the price of a gallon of
gasoline goes up, for example, people look for ways to reduce their consumption by combining
several errands, commuting by carpool or mass transit, or taking weekend or vacation trips
closer to home. Economists call this inverse relationship between price and quantity
demanded the law of demand. The law of demand assumes that all other variables that affect
demand are held constant.

Supply of Goods and Services

When economists talk about supply, they mean the amount of some good or service a
producer is willing to supply at each price. Price is what the producer receives for selling one
unit of a good or service. A rise in price almost always leads to an increase in the quantity
supplied of that good or service, while a fall in price will decrease the quantity supplied. When
the price of gasoline rises, for example, it encourages profit-seeking firms to take several
actions: expand exploration for oil reserves; drill for more oil; invest in more pipelines and oil
tankers to bring the oil to plants where it can be refined into gasoline; build new oil refineries;
purchase additional pipelines and trucks to ship the gasoline to gas stations; and open more
gas stations or keep existing gas stations open longer hours.

Economists call this positive relationship between price and quantity supplied—that a
higher price leads to a higher quantity supplied and a lower price leads to a lower quantity
supplied—the law of supply. The law of supply assumes that all other variables that affect
supply (to be explained in the next module) are held constant.

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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

Supply and demand

Supply and demand illustrate the working of a market and the interaction between suppliers
and consumers. Supply and demand curves determine the price and quantity of goods and
services. Any changes in supply and demand will have an effect on the equilibrium price and
quantity of the good sold. It will also affect the incentives for producers and consumers

 Supply is the amount of the good that is being sold onto the market by producers. At
higher prices, it is more profitable for firms to increase supply, so supply curve slopes
upward.

 Demand is the quantity of the good that consumers wish to buy at different prices. At
higher prices, less will be demanded. As prices fall, more will be demanded.

Law of supply and demand

The law of supply and demand is actually an economic theory that was popularized
by Adam Smith in 1776. The principles of supply and demand have been shown to be very
effective in predicting market behavior.

In a market characterized by perfect competition, price is determined through the

mechanisms of supply and demand. Prices are influenced both by the supply of products from
sellers and by the demand for products by buyers.

The law of demand says that at higher prices, buyers will demand less of an economic

good. The law of supply says that at higher prices, sellers will supply more of an economic
good. These two laws interact to determine the actual market prices and volume of goods that
are traded on a market

A shortage occurs when the quantity demanded for a good exceeds the quantity supplied
at a specific price.
D P

S
D =demand
S = supply
P = price

A surplus occurs when the quantity supplied of a good exceeds the quantity demanded at
a specific price. If a market is not in equilibrium a situation of a surplus or a shortage may exist.

D P

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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

Equilibrium is the state in which market supply and demand balance each other, and as a

result, prices become stable. Generally, an over-supply of goods or services causes prices to
go down, which results in higher demand. The balancing effect of supply and demand results
in a state of equilibrium.

D S P

Persuasive Techniques in Advertising

The persuasive strategies used by advertisers who want you to buy their product can be
divided into three categories: pathos, logos, and ethos.
Pathos: an appeal to emotion. An advertisement using pathos will attempt to evoke an
emotional response in the consumer. Sometimes, it is a positive emotion such as happiness:
an image of people enjoying themselves while drinking Pepsi. Other times, advertisers will use
negative emotions such as pain: a person having back problems after buying the “wrong”
mattress. Pathos can also include emotions such as fear and guilt: images of a starving child
persuade you to send money.

Logos: an appeal to logic or reason. An advertisement using logos will give you the
evidence and statistics you need to fully understand what the product does. The logos of an
advertisement will be the "straight facts" about the product: One glass of Florida orange juice
contains 75% of your daily Vitamin C needs.

Ethos: an appeal to credibility or character. An advertisement using ethos will try to

convince you that the company is more reliable, honest, and credible; therefore, you should
buy its product. Ethos often involves statistics from reliable experts, such as nine out of ten
dentists agree that Crest is the better than any other brand or Americas dieters choose Lean
Cuisine. Often, a celebrity endorses a product to lend it more credibility: Catherine Zeta-Jones
makes us want to switch to T-Mobile.

The following are some more specific strategies that advertisers use. Often, they
overlap with the rhetorical strategies above.

Avante Garde The suggestion that using this product puts the user ahead of the times.
A toy manufacturer encourages kids to be the first on their block to have a new toy.

Weasel Words “Weasel words” are used to suggest a positive meaning without actually
really making any guarantee. A scientist says that a diet product might help you to lose weight
the way it helped him to lose weight. A dish soap leaves dishes virtually spotless.

Magic Ingredients The suggestion that some almost miraculous discovery makes the
product exceptionally effective. A pharmaceutical manufacturer describes a special coating
that makes their pain reliever less irritating to the stomach than a competitor’s.

Patriotism The suggestion that purchasing this product shows your love of your
country. A company brags about its product being made in America.

Transfer Positive words, images, and ideas are used to suggest that the product being
sold is also positive. A textile manufacturer wanting people to wear their product to stay cool
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NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

during the summer shows people wearing fashions made from their cloth at a sunny seaside
setting where there is a cool breeze.

Plain Folks The suggestion that the product is a practical product of good value for
ordinary people. A cereal manufacturer shows an ordinary family sitting down to breakfast and
enjoying their product.
Snob Appeal The suggestion that the use of the product makes the customer part of an
elite group with a luxurious and glamorous lifestyle. A coffee manufacturer shows people
dressed in formal gowns and tuxedos drinking their brand at an art gallery.

Bribery Bribery offers you something “extra.” Buy a burger; get free fries.

Bandwagon The suggestion that you should join the crowd or be on the winning side
by using a product—you don’t want to be the only person without it!

VI. LEARNING ACTIVITIES

1. In your own opinion, what is the difference between what you want and what you
need?
2. As a student, write down your “needs” and “wants”
Needs Wants
1.
2.
3.
4.
5.

3. Now, give an instance that a “want” transforms into a “need.”

VII. ASSIGNMENT
1. Discuss the supply and demand.
2. Give persuasive techniques used in consumer advertising

VIII. EVALUATION

In this lesson,
1. I learned that…(Knowledge)

2. I felt that… (Value/Attitude)

3. I developed… (Skill)

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 Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-BTLED3-1STSEM-2020-2021

IX. REFERENCES

Costanza, Robert, and Lisa Wainger. “No Accounting For Nature: How Conventional
Economics Distorts the Value of Things.” The Washington Post. September 2, 2000.

European Commission: Agriculture and Rural Development. 2013. “Overview of the

CAP Reform: 2014-2024.” Accessed April 13, 205. http://ec.europa.eu/agriculture/cap-post-
2013/.

Radford, R. A. “The Economic Organisation of a P.O.W. Camp.” Economica. no. 48

(1945): 189-201. http://www.jstor.org/stable/2550133.

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