Consumer Behaviour reviewer
right customers at the right time.
LESSON 2 – EVOLUTION OF CONSUMER
BEHAVIOUR
Evolution of Consumer Behaviour in the Digital
Age
This is the change from the “unsophisticated”
world of shopping to this virtual market or more
importantly “where are we going?”
A. Brick or Mortal Retail Store - Sale
of commodities from a single point
of purchase. Physical presence of a
business in a certain location.
B. Internet - Commonly known as
online shopping. Browsing the net
for shopping purposes.
C. Catalogue - Publication with
product photos description with
corresponding price or the
catalogue.
D. Mobile Commerce - Delivery of
electronic commerce capabilities
directly to consumers. E.g. cell
phones now equipped with apps
that can order items and where
payments can be made thru COD’s
or cash
Importance of Retailing
1.Retailers are the final link in the supply chain
between manufacture and consumers.
2.It lets procedure to direct their attention on
producing commodities with not much worry in
terms of distractions with respect to exerting
effort in dealing with end-users.
3.Retailers make the purchase of good easy for
the consumer. The presence of sales personnel
and customer service attends to consumers’
queries in relation to the intended or purchased
commodities.
4.Retailing is about exhibiting products,
describing the features and benefits of
products, stocking products, processing
payments and doing whatever it takes to get
the right procedure at the right price to the
5.Some retailers offer additional services to the
retail transaction like personal shopping
consultation and gift wrapping services to add
something extra to the retail customer
experience and exceed the retail customer
expectations.
Types of Retail Stores
 Department Stores
 Groceries and Supermarkets
 Warehouse Retailers
 Specialty Stores
 Convenience Stores
 Discount Stores
 Mobile Retailer/Mobile Consumer
 Internet E-tailer
Inter – Disciplinary Nature of consumer
Behaviour
Five Inter, Disciplinary Dimensions
1. Economics - Household Management
what is the demand, supply, income
and purchasing power.
2. Psychology - Study of the individual
determination in buying behaviour
which are the need motivation,
personality, perception, attitude and
learning.
3. Sociology - study of groups dynamics in
buying behaviour. Deals not poverty,
social status power, esteem and status.
4. Socio Psychology - study of how an
individual operates in groups and its
effect on buying power. Composed of
group of behaviours influences
conformity to group roles and role
leader
5. Cultural Anthropology - influence of
society on the individual, cultural and
cross cultural issues like beliefs, values,
attitudes towards wealth, joint family
esteem.
  Customer Complaint Analysis

LESSON 3 – MARKET RESEARCH AND III. Quantitative Research

CONSUMER BEJAVIOUR
-It is a measurable, systematic and precise
Market Research offers an extensive collection method used for solving current situations.
of consumer behavior related food and
-It is predominantly number driven and are
beverage reports providing insights into
descriptively graphical in nature. A structured
purchasing behavior, shopper tendencies and
questionnaire with mostly closed questions
motivation, consumer attitudes, trends,
wherein the respondents choose their answers
analysis, opportunities, projections, sales, and
from given specified list of potential responses.
marketing strategies. Specifics on market share,
A variety question style may be used.
segmentation, size, and growth in the US and
global markets are also featured. -For example possible response may look like
any of the following:
I. Importance
1. Strong by disagree
A. Market research provides the necessary
data that is important in decision making. 2. Disagree
B. Enables business to gather data about the 3. Undecided
pleasures and animosities of consumers.
4. Agree
C. Can design promotional strategies to attract
people to try out products offered. 5. Strong by Agree

D. Opens opportunities by tapping areas with OR

unfulfilled or unsatisfied needs. 1. Extremely Important
II. Qualitative Research 2. Very Important
-It is an in-depth explanation by what people 3. Quite Important
think, feel or do and more important why.
4.. Somewhat Important
-The opinions of ‘experts” in focused group
advertisements may reveal unimportance data 5.. Unimportant
not covered by statistics, for it to be effective, 6.. No Opinion
one’s judgement should not be clouded by
emotions. Methods Included in Quantitative Research
are:
-Focused Group Dimensions and in-depth
interviews is the most frequently need  Experiments
qualitative approach. The groups are familiar  Survey Techniques
and experts in their area of endeavour to  Observations
ensure quality response.
Functions of Quantitative Technique
-Research procedures intended to identify
1. Facilitate decisions, making process
consumers feelings and motivations involves a
variety of disguise tests and may include the 2. Provide foods for scientific research
following:
3. Help in choosing best strategy
 Customer Satisfaction Surveys
4. Help minimize cost
 Mystery Shoppers
 Expectation versus experience gap 5. Enable proper deployment of resources
analysis
6. Help in reducing total processing time
7. Help strategize based on objections
Understanding and Appreciation of Doing
Survey
- Survey is basically a method of collecting
information from a sample size group of
respondents with the end view of generalizing
results on various topics of interest.
Modes of survey data collection that are
commonly used:
 Face to face survey or personal
interview
 Telephone Surveys
 Paper and per Survey (maybe thru the
mail)
 Computer surveys
With the advance in technology online surveys
are growing in popularity. While surveys vary
widely on how they are conducted and used,
there are a number of components that are
common in nearly all surveys. Whatever
researched method is employed the data
gathered is analysed and interpreted with the
end view that their chances of success in the
promotion and marketing campaign of a
product can be attained.
LESSON 4 – MARKET SEGMENTATION AND
POSITIONING
In marketing, segmenting, targeting and
positioning (STP) is a broad framework that
summarizes and simplifies the process of
market segmentation.
[1] Market segmentation is a process, in which
groups of buyers within a market are divided
and profiled according to a range of variables,
which determine the market characteristics and
tendencies.
[2] The processes of segmentation, targeting
and positioning are parts of a chronological
order for market segmentation.
 Segmentation comprises identifying the
market to be segmented; identification,
selection, and application of bases to be
used in that segmentation; and
development of profiles.
 Targeting is the process of identifying
the most attractive segments from the
segmentation stage, usually the ones
most profitable for the business.[2]
 Positioning is the final process, and is
the more business-orientated stage,
where the business must assess its
competitive advantage and position
itself in the consumer's minds to
be the more attractive option
Importance of market segmentation, target
marketing and market positioning
 Market Segmentation helps marketers
to be more efficient in terms of lines,
money and other resources. It allows
companies to learn about their
customers and gain a better
understanding of their needs and wants
e.g. clothing segments into male female
and kids section, Therefore can tailor
sales campaign o suit a particular group.
 Target Marketing is important because
it enables the company to channel its
resources to those customers with high
potential for sales growth, interests in
the product and loyalty to the brand.
Target market is the group of
consumers identified as likely purchases
of the company’s product.
 Product Positioning is an important
tool for an effective marketing
strategies planning because it
determines how to best communicate
products’ features to the target
customers based on customer needs,
competition and available
communication channels
Concepts and purpose of segmentation and
targeting
Market segmentation is the breaking down of a
wide range market target into sub sections or
groups with the same mutual needs and
common characteristics. Market segmentation
customers’ needs and market segments are
identified and profiles of resulting market
segments are developed.
Types of Marketing Segmentation
Segment Marketing - Obliging the needs of a
specific group. distinctive marketing mix for
distinct segments. E.g. offering, vegetarian
recipes for the health conscious.
Niche Marketing - Marketing to a solitary
group, modifying the mix to their definite and
entice them letting the firm to participate in
relationship marketing. E.g. Sugar free pastries.
Differentiated Marketing - Establishment retail
compound varieties of a product; apiece
alluring to atypical market segment.. It can
generate better sales. E.g. coke in can, coke
500ml, coke 1.5
Individual Marketing - Tailoring market mix
Reasons for Market Segmentation
 Simplifies proper choice of target
marketing
 Higher profits
 Consumer benefits
 More efficient and economics
marketing efforts
 Speed up tapping of the market,
adapting the offer to intended
purchase.
Factors Influencing Market Segments
 Better marketing performance
 Better services to customers
 Appropriate price fixation
 Designing the products
 Identifies less satisfied segments and
concentrate on them
Consumer market can be segments on the
following attributes
 Geographic – Region, population
density, climate condition
 Demographic – employment, age &
gender, race education, social status,
income and family structures
 Psychographic - interests, opinions,
values, lifestyles
 Psychological Influence – Personality
and self image risk and attitudes and
beliefs
 Social Influence – culture, social
standing and reference group
 Market place behaviour – recognizing
needs, consumer responses to
marketing & communication, price and
product acceptance
 Consumption Behaviour – usage rate,
loyalty and satisfaction
Target Marketing in Specifying the Segments
to pursue. Simply put it is the evaluation of:
 Profitability of the segments
 Attractiveness
 Growth rate
 Company Objective
 Limitations
There are five target market strategies:
Simple Segment Strategy – Also known as
concentrated strategy segment is served with
one marketing mix .
Selective Specialization – Also known as
differentiated strategy. Different mixes are
offered to various segments. Product may or
may not be different.
Product Specialization – The firm specializes in
a particular product and tailor it to different
segments.
Market Specialization – Firm specializes in
serving a particular market segment and offers
different products.
Full Market Coverage – Firm tries to serve the
entire market either thru a mass market
strategy in which a single marketing mix is
offered or different mixes to various segments.
How business position their products for
optimum competitive advantage
Positioning is implementing chosen
image/products and appeal to the chosen
segments.
Positioning strategies are developed through:
 Corporate Identity
 Brand Endorsement
 Competitor
 Repositioning
 Product features
 Use vocation and time
 Price quality
 Product Category
The typical price quality relation is basically
used by consumers when making decisions to
purchase. The price quality relation can be
illustrated by:
 Low price vs. high price
 Basic quality vs. high quality
 Low volume vs. high volume
 Necessity vs. Luxury
 Light vs. Heavy
 Unhealthy vs. healthy e.g. vegetarian
Low tech vs. high tech e.g. electronic gadgets
Successful positioning involves the analysis of
competitors in terms of:
 Market shares
 Market position or status
 Strengths
 Weakness
LESSON 5 – ROLES AND ISSUES
ADVERTISING
Meaning and Significance
- Advertising is a means of communication with
the users of a product and service. According to
American Marketing Association “It is any paid
non-personal presentation of ideas, goods
and/or services for convincing people to buy”.
-Advertising helps in spreading information
about the advertising firm, its products,
qualities and place of availability. It helps to
create a non-personal link between the
advertiser and the receivers of the message.
Roles of Advertising in Business
Advertising is the component of the marketing
process and it is the part involved in
communicating business, product or services.
 Brand Positioning – Creating or
improving the image of a product or
brand.
 Reminder to the Audience – Make
people recall the brand in case they
have forgotten or to implant the
brands’ name in the peoples’ mind.
 Excite or Create a need – Advertising
using graphical art that is tempting and
exciting making people crave for the
product. It is also used to make people
aware of the product.
 Generate Awareness – It helps people
to be aware of a product especially if
it's new or not yet regarded with favour
in the market.
 Increase the Read – This is for wider
coverage. More people are reached out
and more market penetration are
made.
Role of Advertising in the Economy
“Advertising as quoted in House Subcommittee
on Select Measure of the Committee on Ways
and means, 103 Congress, 1st Session 1994 is a
powerful tool in competition. It provides
valuable information about products and
services. Is an efficient and cost-effective
IN manner. In this way, advertising helps the
economy to function smoothly – it keeps prices
low and facilitates the entry of new products
and new firms in the market.
Advertising plays a strong role in the economy
through:
 Informs consumers about products and
services that are available to them with
 a comparison of highlights and features,
benefits and prices
 Through advertising then, consumption
from consumers in triggered resulting
to ease in production thus creating
more jobs. The influence of advertising
penetrates across the broad area of
society and affects all levels of
economic activity.
Advertising also has an important role in the
continuing business cycles by:
 It motivates people to spend more,
therefore promotes job growth, more
demand and more productivity.
 Advertisements may also focus on the
price of service especially during
downturns.
 Motivates another company to increase
its spending to grab more customers in
cases where one company reduces its
advertising spending
Types of Advertising
1. Product Advertising - This involves the
promotion of a product to induce
customers to acquire the product. This
type of advertising usually used to
launch a new product, announce
changes to existing products and to
increase the sale of a particular
product.
2. Corporate Advertising - Type of
advertising that promotes the entire
company. Generally, this is done to
improve the company’s image to the
general public and increase the
goodwill of the company. The present
trend is corporate advertising is
involvement in (CSR) Corporate Social
Responsibility Program.
3. Direct Response Marketing - This
strategy requests prospective
customers to directly and immediately
respond to the advertiser three devices
like:
 Coupon to cut and mail-
discount coupon to be mailed
 Business reply card
 Toll-free telephone number-
free to call hotlines regarding
product
 Internet-on line
 Hotspot to click – helps to
display various forms of
advertising within your hotspot
web
4. Financial Advertising - This is intended
for investors, loan, banking and
mortgage consumers. This helps the
company to attract funds if there are
plans for expansion.
5. Print Advertising - This uses physically
printed media like magazines,
newspaper to reach potential
customers. Could include brochures and
flyers.
6. Outdoor Advertising - Also known as
out of home advertising. It is a mass
media medium. These could include
billboard advertising, street furniture
displays, (bus shelter, kiosks, telephone
booths), transit advertising (taxes
buses, train) mobile billboard.
7. Broad East Advertising - This reaches a
wider coverage as against print media.
Commercials are aired thru there
channels (TV, radio, internet).
8. Convert Advertising - Also known as
advertising in movies. A product or
brand is incorporated in entertainment
and media channels like movies,
teleserye.
9. Celebrity Advertising - This involves the
signing up of celebrities for advertising
campaigns. Uses a celerity’s fame or
social status to promote a product,
brand or service, or to raise awareness
about an issue.
LESSON 6 - Truth in Advertising and False
Advertising
Common Understanding of the truth in
advertising and false understanding
Truth
Advertising products are not bad or wasteful.
There are positive aspects of advertising it has
also been accused of:
 Encouraging materialism and
consumption
 Of stereotyping
 Of causing consumers to purchase
items where there is no need
 Taking advantage of children
 Manipulating consumer’s behaviour for
using sex to sell and
 Generally contributing to the downfall
of our social system
The Philippine government has passed
pertinent laws to protect consumers against
false deceptive and misleading advertisements.
False Advertising
This is defined as advertising statements that
are deceptive, misleading and outright false
about a product or service offered. Even with
the passing of laws to protect the customers
from these false advertisements, in actuality, it
still abounds.
Here are a few types of false advertising:
 Bait and Switch
This is when the prospective customer
is face to face with advertiser he is told
that the company is no longer offering
the particular product but can happily
show them other units.
 Inconsistent Comparison
Advertiser compasses one item with
another but only where it is superior
and units features that are superior in
the other item.
 Pricing Base Deception
This occurs when hidden fees and
surcharges re not disclosed in the
advertised price.
 Misleading Illustrations
This is where illustrations are very
enticing and tempting that the
customers will believe the same in
illustrated.
Companies to avoid false advertisements
should refer to a checklist of honest
advertising which are:
 Be very accurate in making description
and illustration of the product
 Be upfront and truthful about the
pricing
 Treat all competitors fairly
 Be cautious when using the word “free”
 Keep an adequate supply of the
advertised product on hand
LESSON 7 - The Consumer Decision Making
Process
The consumer decision-making process consists
of five steps, which are need recognition,
information search, evaluations of alternatives,
purchase and post-purchase behaviour. These
steps can be a guide for marketers to
understand and communicate effectively
to consumers.
People have different attitudes, preferences,
need and desires. They tend to exhibit different
types of buying behaviours where in the
process of buying products service, it is
important therefore that these buying
behaviours are identified in order to meet the
buyer’s need or desire.
Complex Buying Behaviour
The consumer is highly involved with the
purchase meaning consumer has to buy a
product that is expensive and there are
significant differences between the brands e.g.
purchase of a personal computer or washing
machine.
Habitual Buying Behaviour
Buying decision is made out of habit, not very
particular with brand but prefers familiar brand
e.g. toothpaste colgate.
Dissonance Buying Behaviour
Buyer is highly involved with a purchase but
sees little difference with brands. This usually
occurs when buying expensive products. E.g.
ring
Variety Seeking Buying Behaviour
This is the tendency of consumer that do not
have a high involvement with the product when
there is a significant difference between brands
e.g. potato chips. Consumer seeks variety for no
valid reason.
Factors Influencing Buying Behaviour
There are determinants or factors that
influences buyer behaviour and are classified
on groups as follows:
a) Social
b) Economic
c) Culture
d) Physiological
e) Psychological
f) Personals
A. Social Factors – Explains outside influence of
others on purchase decision.
 Family – Strongly influence by a
member of the family. If particular
product is influence by wife thru
marketers target the women.
 Role & Status – Position of an individual
within the family, work, group of
friends. It is a set of attitudes and
activities that an individual is supposed
to have and do according to his position
on profession.
 Reference Group – This is where a
person influences others because of
social skills, knowledge or other
characteristics.
B. Economic Factors
 Size of the family
 Disposable income – available funds
 Consumer credit – credit status
 Propensity to consumer – proportion of
total income that consumers tend to
spend rather than to save
C. Cultural Factors – Varies from country to
country
 Subculture – each culture contains
different pub cultures such as religion,
nationality, geographic reason
 Social classes groups more or less alike
and ranked against each other
according to a form of hierarchy (similar
values, interests, belongings to same
social class.
D. Physiological Factors – Basic needs
E. Psychological Factors – Human psychology is
a major determinant. Difficult to measure but
powerful enough.
 Motivation – What will drive the
consumer to buy. (security, need,
system, social needs, self-actualization
needs)
 Perception – Process where a person
collects information about the product
and interprets the info to make a
meaningful image of product, (e.g.
customer needs, customer reviews,
social media feedback)
 Learning –Person gets to learn
something more of the product over a
period of time through experience and
depends on skills and knowledge.
 Attitudes and beliefs – It is a
convictional that individual ha son
something. Thru experience, learning,
beliefs are developed
F. Personal Factors – Includes variables such as
age, lifestyle, occupation and personality.
 Age- Perhaps a 20 year old does not
buy like 70 year old
 Lifestyle – example consumers with
(healthy lifestyle would go for health
tools)
 Personality – Interaction of
psychological and psychological
characteristics. Materializes into some
traits- confidence, sociability
 Occupation – Low income, high salaried
Understand buying sales and motives
Buying motives refer to influences and reasons
that promote a buyer to choose a particular
product, it refers to all the characteristics of a
product that make it preferable to another.
Consumer buying motive includes the
following:
 Need
 Health benefits
 Curiosity
 Administration
 Fashion
 Comfort and Convenience
 Varity
 Price/prestige
Types of Buying Motives:
1. Rational – Based on one’s purpose. There
must be a good reason to buy and that reason is
justified, maybe there price, quality, necessity,
durability safety reliability or even simplicity.
2. Emotional – those which invoke a person
emotionally so that he buys without
rationalizing or analysing its attributes.
Consumer buys because emotionally attached.
3. Patronage – Motives which make a consumer
buy from a particular shop. This can also fall
under rational and emotional motive within a
reference group that influences buying
behaviour several roles have been identified.
 Initiator – Person who suggest buying
 Influencer – Person whose point of view
influence the buyer
 Decision maker – person who will
choose high product to buy
 Buyer – Person who selects the supplier
and arranges terms of purchase
 End user – Person who makes use of
purchase
 Gatekeeper – Person changed with
controlling information and access to
both decision maker and influencer.
LESSON 8 - Models of Consumer Behaviour
It is essential for a company to know and
understand the consumer response or
behaviour on the various products features,
prices and effect of advertising as well as their
effect on the product getting a competitive
edge. The study of consumer behaviour are
classified into two; the transactional and
contemporary models
The traditional modules were developed by
economists with the end view of understanding
the economic system whereby it is assumed
that a human being rational will make his
purchases decision based on maximizing ability
benefits with limited purchasing power. The
traditional models are broken down into the
following categories:
1. Economic Model - This is based on certain
prediction of buying behaviour
a. Price effect – lesser the price of
product, more will be the quantity
purchased.
b. Substitution Effect – lesser the price of
the substitute, lesser will be the
quantity of the original product bought.
c. Income effect – More the purchasing
power, more the quantity of product
bought.
2.Learning Model
On the other hand psychologist argued
that human beings are influenced by both
innate and learned needs. Innate needs being
primary needs like hunger, thirst and shelter
while learned needs may be fear, guilt.
The various products or services will act
as a stimulus to satisfy drives e.g. hunger
towards foods which when consumed will
satisfy the needs. Learning theorists infers that
the response of satisfaction feeding (feeling)
reinforces the relationship between drive
(internal stimulus) and the drive reducing
stimulus and related cues (stimuli coming from
marketing and social environment) when the
consumer learn to associate connections
between the stimulus and response, it becomes
a habit and leads to repeat purchase.
3.Psychoanalytical Model
This model is based on the work of the
psychologists who were concerned with
personality, They were of the view that human
needs and motives operates at the conscious
and subconscious levels. According to Sigmunt
Freud human behaviour (personality) is the
outcome of a “id” – the source of all physic
energy which drives to act. (Super ego) – the
internal representation of what society
approves (ego) the conscious directing “id”
impulse to find satisfaction in a socially
accepted manner.
4.Sociological Model
In this model, the buyer is a part of the
institution called society, Since he is living in a
society, he gets influenced by it and also
influences others. The buyer plays many roles
as part of various formal and informal
organizations. Such interaction leaves on
impression on him and plays a role in
influencing his buying behaviour. An individual
will adopt the role suitable to conform to the
style and behavioural pattern of the social class
he belongs to.
1. Howard – Sheth Model
This model tries to represents the rational
broad choice behaviour by buyer when faced
with situations where information is incomplete
and abilities are limited. In this model four sets
of variable are considered:
a) Input variables
b) Hypothetical constructions (Perceptual
and Learning)
c) Output Variables
d) External/exogenous variables
A. Input variable – Includes three types of
stimuli namely:
a) Significant stimuli – shows the physical
tangible characteristics of the product
namely: price, quality, uniqueness,
availability and service rendered
b) Symbolic stimuli – The verbal or visual
characteristics of the product.
c) Social stimuli – Inputs are provided by
family, friends, social groups, peers or
social class
B. Hypothetical constructs (Perceptual and
Learning) – It includes psychological variables
influencing consumer behaviour during the
decision making process like motives, attitudes
and perception. Two categories under this
model are:
1. Perceptual – Helps in gathering and
processing information for selecting a brand.
Under this category there are various factors
that influence interpretation or perception.
 Stimulus Ambiguity – This occurs when
the consumer consist completely
understand or interpret the stimuli he
has received nor does he know how to
respond.
 Perceptual Bias – Occurs whenever
information is altered in modified to
conform to his needs, desires and
experiences.
 Search for information – actively seeks
information on the brand and /or other
features associated with it.
2. Learning Construct – This is where buyer
forms attitudes, opinion and knowledge
influencing buying decision also includes
evaluation after purchase. An intelligent
customer must know how to manage mental
rules necessary in matching and ranking all
option available.
Predisposition refers to a preferred brand and
customer usually expresses an attitude towards
it.
Inhibitors refers to the environmental variables
like price and time. Such variable may establish
a certain degree of pressure which may lead to
the restrain or inhibition on the purchase of the
preferred brand. In most cases, price in the
deciding factor is a purchase.
C. Output Variable – These are the ultimate
response of a consumer. It is the purchase
decision. Favourable post purchase evaluation
will lead to position attitude thus increasing
brand understanding the hierarchy of output Here is the output or result of area becomes the
variables and sequence in this order. input for area 2 and so on. This model suggests
that messages from the 1st influences the
 Attention – This is based on the
predisposition of the consumer towards the
importance of individuals information
product.
gathered and such information is
accepted after the buyer has seen the
product or stimulus.
Course Code & Title: MKT4
 Comprehension – This deals with the
amount of information that the buyer Consumer Behaviour
has regarding the brand that is being
Lesson Number: Module 1
stored and process in his mind.
 Cognition – This refers to the evaluation Topic: Introduction to the Study of
of the brand’s potential to satisfy his Consumer Behaviour
motives. It is creating an attitude
towards the product. Introduction:
 Intention – refers to the brand which a
buyer intends to buy.
The evolving discipline of consumer
 Purchase behaviour – This reflects the behaviour amidst numerous spheres
buyers predict position to buy as
from the rational partialities that
modified by environmental factors as
time and price. influence our rational choices, to the

D. External/ Exogenous Variables – As the word manners in which were prompted by our
suggest there are factors that includes social friends, as well as the nudges that the
class, culture, financial capacity and subculture.
These indirectly influence the consumer but the
business and maybe even the public
level of influence varies from on consumer to sector and celebrities can endorse to
another. Advantage external in nature it still
contour our behaviour.
plays a significant influence in the buyers
decision.
Lesson Presentation:
The Nicosia Model I. Consumer behaviour is the study
This was developed by F.M. Nicosia and is a
model of purchase decision making by either a of how individuals, groups or
group or a solo individual. It strives to explain organizations commonly known
the buying behaviour by creating a link between
the organization and potential customer.
as customers or consumers
-The analysis is centered between the individual select, buy, use and dispose of
as a system with stimuli as the input to the
goods services ideas and
system and the individual’s behaviour as the
output of the system. experience that satisfy their

According to this model four (4) different needs and wants.

areas/field of the decision process are present. It is a decision process and
Area 1 – Consumer Attitude physical activities that individuals
Area 2 – Search and Evaluation engage in the evaluation,
Area 3 – Act of Purchase acquisition use and dispose of
Area 4 – Feedback
above goods and services.
 Parameters used in the decision
process are the 3 W’s and 2 H’s,
what, where, when, how and how
much to spend.
II. Nature, Scope, Application
A. Nature
Consumer Behaviour shows all
the activities involved from the
organization to the disposal
phase.
The buying process is composed
of the following cycle
1. Identification of the need and
want.
2. Information Search – Gather
data about the goods or service.
3. Alternative Evaluation – Look
for alternatives e.g. comparing
prices, quality of products, useful
life.
4. Purchase Decision – decides
to buy or not to buy.
5. Post Purchase Evaluation –
Factors that Influence Demand
how good or how worthy is the
product.
Factors influencing consumer
behaviour Lifestyle, habits, ways
of living, income locality
There is this “spread effect”
which means that the behaviour
is influenced by those of others
especially those who are
“admire”.
Another is the ‘Reflect Status”
meaning that the decision to bury
is based on what status is
desired or can be like “keep up
with the Joneses”.
Consumption behaviour may be
viewed according to individual
and environmental determinants.
B. Scope and Application
Reasons why we purchase goods
and services
 Human Needs – basic
needs
 Human wants – not
necessarily needed but
wants to improve quality of
life.
Consumer Behaviour and
1. Income – Amount of income
triggers the purchasing power.
2. Climactic/ Seasonal Condition
– Purchase goods based on what
is available at a time.
3. Price of Related Goods
A. Complementary Goods – e.g.
3 in one coffee. Need coffee with
sugar and cream.
 B. Substitute Goods – alternative
to the desired item e.g. Nike
brand not affordable so substitute
with another brand.
4. Price Expectation – The price
movement e.g. Price increase in
gasoline or food. Will stock up
before the increase.
5. Taste and Preference –
Fashion changes and effect of
advertising.
Consumer behaviour deals with
the buying behaviour of individuals
based on their purchasing and
consumption experience. The principal
determining factors in the need, where
there is a need there is a demand.
Applications of Consumer
Behaviour
 Analysing market
opportunities. Identifies
unsatisfied needs and
wants.
 Selecting Target Market -
Periodic assessment of
market opportunities
based on how individuals
behave and how they
make purchase decisions.
 Marketing Mix Decision –
Determine the right
marketing mix for
respective business based
on the 4 P’s of marketing
which is product Price
Promotion and Place
(Distribution channel a
logistics).
 Use in social and non-
profit marketing.
This is done to design marketing
strategies to increase awareness of
benefits for society.
Reasons for studying
Consumer Behavior
1. Production Policies
Policies are very important
to earn and maintain consumers
trust. Consumer behaviour is not
just confined to taste preference.
The business enterprise must
consider the habits, culture and
traditions of its customers. An
example is that non-inclusion of
pork meat due to religious
restrictions. Production policies
should follow to specifications
with integrity. Production policies
may differ when they are catering
to a different set of consumers.
2. Price Policies
Most buyers are mindful of the
price tag. People tend to compare prices
vis-à-vis alternative substitutes.
Prices should be competitive and
regulated to benefit both the
consumers and the business sector.
3. Decision Concerning
Channels of Distribution
A firm’s distribution objectives will
eventually be favourably linked. Rate of
charge has to be traded off
alongside speed of delivery and
intensity. Notice the difference in
the price of similar products sold in the
24-hour convenience store as
compared to those sold in
supermarkets. Which one sells
cheaper? Other prospects draw in
parallel distribution. In today’s day and
age, many products services are made
available through conventional channels
via the internet thus increasing
distribution channels and options
availability.
4. Sales Promotion Decisions
Sales motivate people to buy
more. Our brains are stimulated on
sales being associated with paying
less leading to bigger savings.
Promotional campaigns awaken our
desire to rush to the mall and avail of big
discounts. It’s a win-win for both
consumers and the enterprise.
5. Developing Market
Opportunities
Understanding consumer needs,
glitches, expectations and other
issues are beneficial for the
market to design and offer
something new. This could serve
as an opportunity for marketers to
create something that would
address most concerns
6. Swift Launch of new
products.
Due to technological
advancement, creation and innovation
of new products has become
more widespread than ever. Take the
case of cell phones. We see them
launch new models not just once
a year. And many of us have more than
one cell phone because we tend to
buy more and we don’t want to be
outdated.
7. Implementing the Marketing
Concept
The marketing concept is the
philosophy that business should
first and foremost analyse the
needs of their market and then
make decisions to deliver the
desired customer satisfaction
better than their competition.
Generalization
The students should have
thoroughly understood the Nature,
Scope and application and what
consumer behaviour is all about.
Consumer behaviour has many
Course Code and Title: MKT4 Consumer Behaviour

Lesson Number: 2

Professor: Jonathan A. Comilang, MBM

Topic 2 : Evolution of Consumer Behavior

Introduction

An evolutionary approach considers the adoptive functional of behaviour. It means to use

evolutionary approach to generate predictions and new insights about consumer behaviour.

dimensions, which is characterized by corresponding price or the

different needs. The pattern of catalogue.
consumption varies from one H. Mobile Commerce - Delivery of
consumer to another. electronic commerce capabilities
directly to consumers. E.g. cell
phones now equipped with apps
Lesson Presentation:
that can order items and where
Evolution of Consumer Behaviour payments can be made thru
in the Digital Age COD’s or cash

This is the change from the

“unsophisticated” world of shopping to Importance of Retailing

this virtual market or more importantly 1. Retailers are the final link in

“where are we going?” the supply chain between

manufacture and consumers.
E. Brick or Mortal Retail Store - Sale
2. It lets procedure to direct their
of commodities from a single
attention on producing
point of purchase. Physical
commodities with not much
presence of a business in a
worry in terms of distractions
certain location.
with respect to exerting effort
F. Internet - Commonly known as
in dealing with end-users.
online shopping. Browsing the
3. Retailers make the purchase
net for shopping purposes.
of good easy for the
G. Catalogue - Publication with
consumer. The presence of
product photos description with
sales personnel and customer
 service attends to consumers’ Five Inter, Disciplinary
queries in relation to the Dimensions
intended or purchased
1. Economics - Household
commodities.
Management what is the
4. Retailing is about exhibiting
demand, supply, income and
products, describing the
purchasing power.
features and benefits of
2. Psychology - Study of the
products, stocking products,
individual determination in buying
processing payments and
behaviour which are the need
doing whatever it takes to get
motivation, personality,
the right procedure at the right
perception, attitude and learning.
price to the right customers at
3. Sociology - study of groups
the right time.
dynamics in buying behaviour.
5. Some retailers offer additional
Deals not poverty, social status
services to the retail
power, esteem and status.
transaction like personal
4. Socio Psychology - study of
shopping consultation and gift
how an individual operates in
wrapping services to add
groups and its effect on buying
something extra to the retail
power. Composed of group of
customer experience and
behaviours influences conformity
exceed the retail customer
to group roles and role leader.
expectations.
5. Cultural Anthropology -
Types of Retail Stores influence of society on the
individual, cultural and cross
 Department Stores
cultural issues like beliefs,
 Groceries and Supermarkets
values, attitudes towards wealth,
 Warehouse Retailers
joint family esteem.
 Specialty Stores
 Convenience Stores
 Discount Stores
 Mobile Retailer/Mobile Consumer
 Internet E-tailer

Inter – Disciplinary Nature of

consumer Behaviour
 Generalization A. Market research provides the
Appropriate products are produced necessary data that is
depending on the consumers need and important in decision making.
how they can purchase, do they still B. Enables business to gather
need to go to the market? Not anymore data about the pleasures and
because now they can shop through animosities of consumers.
internet shopping websites and the C. Can design promotional
product that they purchased will be strategies to attract people to
delivered directly to consumers. They no try out products offered.
longer interrelate with the marketers D. Opens opportunities by
directly which is in demand during this tapping areas with unfulfilled
time of pandemic. or unsatisfied needs.

II. Qualitative Research

It is an in-depth explanation by what
people think, feel or do and more
important why. The opinions of
Course Code and Title: MKTE4 Consumer Behaviour

Lesson Number: 3

Topic 3: Market Research and Consumer Behaviour

Introduction:

MarketResearch.com offers an extensive collection of consumer behavior related food and

beverage reports providing insights into purchasing behavior, shopper tendencies and
motivation, consumer attitudes, trends, analysis, opportunities, projections, sales, and
marketing strategies. Specifics on market share, segmentation, size, and growth in the US
and global markets are also featured.

‘experts” in focused group

advertisements may reveal
unimportance data not covered by
Lesson Presentation:
statistics, for it to be effective, one’s
I. Importance
 judgement should not be clouded by 1. Strong by disagree
emotions. 2. Disagree
Focused Group Dimensions and in- 3. Undecided
depth interviews is the most 4. Agree
frequently need qualitative approach. 5. Strong by Agree
The groups are familiar and experts
OR
in their area of endeavour to ensure
quality response. 1. Extremely Important

Research procedures intended to 2. Very Important

identify consumers feelings and 3. Quite Important
motivations involves a variety of 4.. Somewhat Important
disguise tests and may include the 5.. Unimportant
following: 6.. No Opinion
 Customer Satisfaction
Methods Included in Quantitative
Surveys
Research are:
 Mystery Shoppers
 Expectation versus  Experiments

experience gap analysis  Survey Techniques

 Customer Complaint Analysis  Observations
III. Quantitative Research
Functions of Quantitative
It is a measurable, systematic
Technique
and precise method used for solving
1. Facilitate decisions, making
current situations. It is
process
predominantly number driven and are
2. Provide foods for scientific
descriptively graphical in nature. A
research
structured questionnaire with mostly
3. Help in choosing best strategy
closed questions wherein the
4. Help minimize cost
respondents choose their answers from
5. Enable proper deployment of
given specified list of potential
resources
responses. A variety question style may
6. Help in reducing total
be used.
processing time
For example possible response
7. Help strategize based on
may look like any of the following:
objections
 marketing campaign of a product
Understanding and Appreciation can be attained.
of Doing Survey
Generalization
Every company uses different
Doing Survey
concepts in promoting their
Survey is basically a method of
products and services. Consumer
collecting information from a
behavior on the other hand,
sample size group of
centers on how consumers react
respondents with the end view of
to the marketing environment.
generalizing results on various
When a company can understand
topics of interest.
why people buy, what to buy and
reason to buy. The more chances
that the promotion and marketing
Modes of survey data collection
campaign of a particular product
that are commonly used:
or service can be attained.
 Face to face survey or
personal interview
 Telephone Surveys
 Paper and per Survey
(maybe thru the mail)
 Computer surveys

With the advance in technology

online surveys are growing in
popularity. While surveys vary
widely on how they are
conducted and used, there are a
number of components that are
common in nearly all surveys.
Whatever researched method is
employed the data gathered is
analysed and interpreted with the
end view that their chances of
success in the promotion and
 and wants e.g. clothing

Course Code and Title: MKTE4 Consumer Behaviour

Lesson Number 4

Topic 4: Market Segmentation and Positioning

Introduction:

In marketing, segmenting, targeting and positioning (STP) is a broad framework that

summarizes and simplifies the process of market segmentation.[1] Market segmentation is a
process, in which groups of buyers within a market are divided and profiled according to a
range of variables, which determine the market characteristics and tendencies. [2] The
processes of segmentation, targeting and positioning are parts of a chronological order for
market segmentation.

 Segmentation comprises identifying the market to be segmented; identification,

selection, and application of bases to be used in that segmentation; and development of
profiles.
 Targeting is the process of identifying the most attractive segments from the
segmentation stage, usually the ones most profitable for the business. [2]
 Positioning is the final process, and is the more business-orientated stage, where the
business must assess its competitive advantage and position itself in the consumer's
minds to be the more attractive option
segments into male female
Lesson Presentation: and kids section, Therefore

I. Importance of market can tailor sales campaign o

segmentation, target marketing suit a particular group.

and market positioning  Target Marketing is important

 Market Segmentation helps because it enables the

marketers to be more efficient company to channel its

in terms of lines, money and resources to those customers

other resources. It allows with high potential for sales

companies to learn about their growth, interests in the

customers and gain a better product and loyalty to the

understanding of their needs brand. Target market is the

 group of consumers identified
as likely purchases of the
company’s product.
 Product Positioning is an
important tool for an effective
marketing strategies planning
because it determines how to
best communicate products’
features to the target
customers based on customer
needs, competition and
available communication
channels
II. Concepts and purpose of
segmentation and targeting
Market segmentation is the
breaking down of a wide range
market target into sub sections or
groups with the same mutual
needs and common
characteristics. Market
segmentation customers’ needs
and market segments are
identified and profiles of resulting
market segments are developed.
Types of Marketing Segmentation
 Segment Marketing
Obliging the needs of a specific
group. distinctive marketing mix
for distinct segments. E.g.
offering, vegetarian recipes for
the health conscious.
 Niche Marketing
Marketing to a solitary group,
modifying the mix to their definite
and entice them letting the firm to
participate in relationship
marketing. E.g. Sugar free
pastries.
 Differentiated Marketing
Establishment retail compound
varieties of a product; apiece
alluring to atypical market
segment.. It can generate better
sales. E.g. coke in can, coke
500ml, coke 1.5
 Individual Marketing
Tailoring market mix
Reasons for Market
Segmentation
 Simplifies proper choice of
target marketing
 Higher profits
 Consumer benefits
 More efficient and
economics marketing
efforts
 Speed up tapping of the
market, adapting the offer
to intended purchase.
Factors Influencing Market
Segments
 Better marketing
performance
  Better services to
customers
 Appropriate price fixation
 Designing the products
 Identifies less satisfied
segments and concentrate
on them
Consumer market can be
segments on the following
attributes
 Geographic – Region,
population density, climate
condition
 Demographic –
employment, age &
gender, race education,
social status, income and
family structures
 Psychographic - interests,
opinions, values, lifestyles
 Psychological Influence –
Personality and self image
risk and attitudes and
beliefs
 Social Influence – culture,
social standing and
reference group
 Market place behaviour –
recognizing needs,
consumer responses to
marketing &
communication, price and
product acceptance
 Consumption Behaviour –
usage rate, loyalty and
satisfaction
Target Marketing in Specifying
the Segments to pursue. Simply
put it is the evaluation of:
 Profitability of the
segments
 Attractiveness
 Growth rate
 Company Objective
 Limitations
There are five target market
strategies:
 Simple Segment Strategy
– Also known as
concentrated strategy
segment is served with
one marketing mix .
 Selective Specialization –
Also known as
differentiated strategy.
Different mixes are offered
to various segments.
Product may or may not
be different.
 Product Specialization –
The firm specializes in a
particular product and
tailor it to different
segments.
  Market Specialization –
Firm specializes in serving
a particular market
segment and offers
different products.
 Full Market Coverage –
Firm tries to serve the
entire market either thru a
mass market strategy in
which a single marketing
mix is offered or different
mixes to various
segments.
III. How business position their
products for optimum competitive
advantage
Positioning is implementing
chosen image/products and
appeal to the chosen segments.
Positioning strategies are
developed through:
 Corporate Identity
 Brand Endorsement
 Competitor
 Repositioning
 Product features
 Use vocation and time
 Price quality
 Product Category
The typical price quality relation
is basically used by consumers
when making decisions to
purchase. The price quality
relation can be illustrated by:
 Low price vs. high price
 Basic quality vs. high
quality
 Low volume vs. high
volume
 Necessity vs. luxury
 Light vs. heavy
 Unhealthy vs. healthy e.g.
vegetarian
Low tech vs. high tech e.g.
electronic gadgets Successful
positioning involves the analysis
of competitors in terms of:
 Market shares
 Market position or status
 Strengths
 Weakness
Generalization
Market Segmentation identify bases for
segmenting the market and develop
segment profiles, Target Marketing
develop measure segment
attractiveness and Market Positioning
develop for target segments and
develop a marketing mix for each
segment
Course Code: MKTE 4 Consumer
Behaviour
Lesson Number: WEEK 5
Topic: Roles and Issues in
Advertising
Introduction:
In our present business world, views are
exposed to thousands of advertisements
every minute, every hour, every day. It
came even a point that it is almost
impossible for the target audience to
pay attention to all those
advertisements. Advertising became
diverse as the customers it seeks to
reach
Lesson Presentation:
I. Meaning and Significance
Advertising is a means of
communication with the users
of a product and service.
According to American
Marketing Association “It is
any paid non-personal
presentation of ideas, goods
and/or services for convincing
people to buy”.
Advertising helps in spreading
information about the
advertising firm, its products,
qualities and place of
availability. It helps to create a
non-personal link between the
advertiser and the receivers of
the message.
II. Roles of Advertising in
Business
Advertising is the component
of the marketing process and
it is the part involved in
communicating business,
product or services.
A. Roles of Advertising in Business
 Brand Positioning – Creating
or improving the image of a
product or brand.
 Reminder to the Audience –
Make people recall the brand
in case they have forgotten or
to implant the brands’ name in
the peoples’ mind.
 Excite or Create a need –
Advertising using graphical art
that is tempting and exciting
making people crave for the
product. It is also used to
make people aware of the
product.
 Generate Awareness – It
helps people to be aware of a
product especially if it's new
or not yet regarded with
favour in the market.
 Increase the Read – This is
for wider coverage. More
 people are reached out and
more market penetration are Advertising also has an important
made. role in the continuing business
cycles by:
B. Role of Advertising in the Economy  It motivates people to spend
“Advertising as quoted in House more, therefore promotes job
Subcommittee on Select Measure of growth, more demand and
the Committee on Ways and means, more productivity.
103 Congress, 1st Session 1994 is a  Advertisements may also
powerful tool in competition. It focus on the price of service
provides valuable information about especially during downturns.
products and services. Is an efficient  Motivates another company to
and cost-effective manner. In this increase its spending to grab
way, advertising helps the economy more customers in cases
to function smoothly – it keeps prices where one company reduces
low and facilitates the entry of new its advertising spending
products and new firms in the
Types of Advertising
market.
To ensure reassure customers that a
company is viable and successful,
Advertising plays a strong role in the
different types of advertising are put to
economy through:
use
Informs consumers about products
and services that are available to 1. Product Advertising
them with a comparison of highlights This involves the promotion of a
and features, benefits and prices. product to induce customers to
Through advertising then, acquire the product. This type of
consumption from consumers in advertising usually used to
triggered resulting to ease in launch a new product, announce
production thus creating more jobs. changes to existing products and
The influence of advertising to increase the sale of a
penetrates across the broad area of particular product. E.g. in the
society and affects all levels of food industry.
economic activity.  Eat all you can feature
  Coffee stops to include
dairies, sweets etc.
2. Corporate Advertising
Type of advertising that promotes
the entire company. Generally, this is
done to improve the company’s
image to the general public and
increase the goodwill of the
company. The present trend is
corporate advertising is involvement
in (CSR) Corporate Social
Responsibility Program.
3. Direct Response Marketing
This strategy requests
prospective customers to directly
and immediately respond to the
advertiser three devices like:
 Coupon to cut and mail-
discount coupon to be mailed
 Business reply card
 Toll-free telephone number-
free to call hotlines regarding
product
 Internet-on line
 Hotspot to click – helps to
display various forms of
advertising within your hotspot
web
4. Financial Advertising
This is intended for investors, loan,
banking and mortgage consumers. This
helps the company to attract funds if
there are plans for expansion. Ex.
Central banks, credit unions, savings
and loans association
5. Print Advertising
This uses physically printed media like
magazines, newspaper to reach
potential customers. Could include
brochures and flyers.
6. Outdoor Advertising
Also known as out of home
advertising. It is a mass media
medium. These could include
billboard advertising, street
furniture displays, (bus shelter,
kiosks, telephone booths), transit
advertising (taxes buses, train)
mobile billboard.
7. Broad East Advertising
This reaches a wider coverage as
against print media. Commercials are
aired thru there channels (TV, radio,
internet).
8. Convert Advertising
Also known as advertising in movies. A
product or brand is incorporated in
entertainment and media channels like
movies, teleserye.
9. Celebrity Advertising
This involves the signing up of
celebrities for advertising campaigns.
Uses a celerity’s fame or social status to
promote a product, brand or service, or
to raise awareness about an issue.
Generalization:
Advertising helps the company generate
more income using different types of
advertising. It starts on how they
introduce their products and on how
they attract customers to purchase from
them and motivates people to spend
more.
Course Code & Title : MKTE 4
Consumer Behaviour
Lesson Number : Week 6
Topic : Truth in
Advertising and False Advertising
Introduction
When consumers see or hear
an advertisement, whether it's on the
Internet, radio or be truthful,
not misleading, and, when appropriate,
backed by scientific evidence. The FTC
enforces these truth-in-advertising laws,
and it applies the same.
Common Understanding of the truth
in advertising and false
understanding
A. Truth
Advertising products are not
bad or wasteful. There are
positive aspects of advertising
it has also been accused of:
 Encouraging
materialism and
consumption
 Of stereotyping
 Of causing consumers
to purchase items
where there is no need
 Taking advantage of
children
 Manipulating
consumer’s behaviour
for using sex to sell
and
 Generally contributing
to the downfall of our
social system
The Philippine government has
passed pertinent laws to protect
consumers against false
deceptive and misleading
advertisements.
B. False Advertising
This is defined as advertising
statements that are deceptive,
misleading and outright false
about a product or service
offered. Even with the passing of
laws to protect the customers
from these false advertisements,
in actuality, it still abounds. Companies to avoid false
advertisements should refer to a
Here are a few types of false
checklist of honest advertising
advertising:
which are:
 Bait and Switch  Be very accurate in
This is when the making description and
prospective customer is illustration of the product
face to face with advertiser  Be upfront and truthful
he is told that the company about the pricing
is no longer offering the
 Treat all competitors fairly
particular product but can
 Be cautious when using
happily show them other
the word “free”
units.
 Keep an adequate supply
 Inconsistent Comparison
of the advertised product
Advertiser compasses one
on hand
item with another but only
where it is superior and
units features that are Generalization:
superior in the other item.
Advertising has its hordes and
 Pricing Base Deception
detractors of critics which place it in in
This occurs when hidden
several controversies. Here in the
fees and surcharges re not
Philippines they are conscious and
disclosed in the advertised
determined to achieve the truth in
price.
advertising.
 Misleading Illustrations
This is where illustrations
are very enticing and Course Code: MKTE 4 Consumer
tempting that the Behaviour
customers will believe the Lesson Number: WEEK 7
same in illustrated e.g. Topic: The Consumer Decision
chorizo which Joy Making Process
purchased. (Hahaha) Introduction:
The consumer decision-making
process consists of five steps, which are
need recognition, information search,
evaluations of alternatives, purchase
and post-purchase behaviour. These
steps can be a guide for marketers to
understand and communicate effectively
to consumers.
Lesson Presentation:
I. People have different attitudes,
preferences, need and desires.
They tend to exhibit different
types of buying behaviours where
in the process of buying products
service, it is important therefore
that these buying behaviours are
identified in order to meet the
buyer’s need or desire.
a) Complex Buying Behaviour
The consumer is highly involved
with the purchase meaning
consumer has to buy a product
that is expensive and there are
significant differences between
the brands e.g. purchase of a
personal computer or washing
machine.
b) Habitual Buying Behaviour
Buying decision is made out of
habit, not very particular with
brand but prefers familiar brand
e.g. toothpaste colgate.
c) Dissonance Buying Behaviour
Buyer is highly involved with a
purchase but sees little difference
with brands. This usually occurs
when buying expensive products.
E.g. ring
d) Variety Seeking Buying
Behaviour
This is the tendency of consumer
that do not have a high
involvement with the product
when there is a significant
difference between brands e.g.
potato chips. Consumer seeks
variety for no valid reason.
II. Factors Influencing Buying
Behaviour
There are determinants or factors
that influences buyer behaviour
and are classified on groups as
follows:
a) Social
b) Economic
c) Culture
d) Physiological
e) Psychological
f) Personals
A. Social Factors – Explains
outside influence of others on
purchase decision.
  Family – Strongly
influence by a member of
the family. If particular
product is influence by
wife thru marketers target
the women.
 Role & Status – Position of
an individual within the
family, work, group of
friends. It is a set of
attitudes and activities that
an individual is supposed
to have and do according
to his position on
profession.
 Reference Group – This is
where a person influences
others because of social
skills, knowledge or other
characteristics.
B. Economic Factors
 Size of the family
 Disposable income –
available funds
 Consumer credit – credit
status
 Propensity to consumer –
proportion of total income
that consumers tend to
spend rather than to save
C. Cultural Factors – Varies from
country to country
 Subculture – each culture
contains different pub
cultures such as religion,
nationality, geographic
reason
 Social classes groups
more or less alike and
ranked against each other
according to a form of
hierarchy (similar values,
interests, belongings to
same social class.
D. Physiological Factors – Basic
needs
E. Psychological Factors –
Human psychology is a major
determinant. Difficult to measure
but powerful enough.
 Motivation – What will
drive the consumer to buy.
(security, need, system,
social needs, self-
actualization needs)
 Perception – Process
where a person collects
information about the
product and interprets the
info to make a meaningful
image of product, (e.g.
customer needs, customer
reviews, social media
feedback)
  Learning –Person gets to
learn something more of
the product over a period
of time through experience
and depends on skills and
knowledge.
 Attitudes and beliefs – It is
a convictional that
individual ha son
something. Thru
experience, learning,
beliefs are developed
F. Personal Factors – Includes
variables such as age, lifestyle,
occupation and personality.
 Age- Perhaps a 20 year
old does not buy like 70
year old
 Lifestyle – example
consumers with (healthy
lifestyle would go for
health tools)
 Personality – Interaction of
psychological and
psychological
characteristics.
Materializes into some
traits- confidence,
sociability
 Occupation – Low income,
high salaried
III. Understand buying sales and
motives
Buying motives refer to
influences and reasons that
promote a buyer to choose a
particular product, it refers to all
the characteristics of a product
that make it preferable to another
Consumer buying motive
includes the following:
 Need
 Health benefits
 Curiosity
 Administration
 Fashion
 Comfort and Convenience
 Varity
 Price/prestige
Types of Buying Motives:
1. Rational – Based on one’s
purpose. There must be a good
reason to buy and that reason is
justified, maybe there price,
quality, necessity, durability
safety reliability or even
simplicity.
2. Emotional – those which
invoke a person emotionally so
that he buys without rationalizing
or analysing its attributes.
 Consumer buys because
emotionally attached.
3. Patronage – Motives which
make a consumer buy from a
particular shop. This can also fall
under rational and emotional
motive within a reference group
that influences buying behaviour
several roles have been
identified.
 Initiator – Person who
suggest buying
 Influencer – Person whose
point of view influence the
buyer
 Decision maker – person
who will choose high
product to buy
 Buyer – Person who
selects the supplier and
arranges terms of
purchase
 End user – Person who
makes use of purchase
 Gatekeeper – Person
changed with controlling
information and access to
both decision maker and
influencer.
Generalization:
Consumer decision making involves
several steps. Information search,
recognition, evaluation of alternatives
are some. Understanding this model
guarantees those implementing
marketing campaign consider the
process, rather than just deciding to
make a purchase.
Course Code: MKTE 4 Consumer
Behaviour
Lesson Number: WEEK 8
Topic: Models of Consumer
Behaviour
Introduction:
It is essential for a company to know
and understand the consumer response
or behaviour on the various products
features, prices and effect of advertising
as well as their effect on the product
getting a competitive edge. The study of
consumer behaviour are classified into
two; the transactional and contemporary
models
Learning Objectives:
1. Distinguish the classification of
consumer behaviour models
2. Evaluate various models commonly
used to consumer behaviour
3. Produce an insight about economic
models.
Lesson Presentation:
The traditional modules were developed
by economists with the end view of
understanding the economic system
whereby it is assumed that a human
being rational will make his purchases
decision based on maximizing ability
benefits with limited purchasing power.
The traditional models are broken down
into the following categories:
1. Economic Model - This is based
on certain prediction of buying
behaviour
a. Price effect – lesser the price
of product, more will be the
quantity purchased.
b. Substitution Effect – lesser
the price of the substitute,
lesser will be the quantity of
the original product bought.
c. Income effect – More the
purchasing power, more the
quantity of product bought.
2. Learning Model
On the other hand psychologist
argued that human beings are
influenced by both innate and
learned needs. Innate needs being
primary needs like hunger, thirst and
shelter while learned needs may be
fear, guilt.
The various products or services
will act as a stimulus to satisfy drives
e.g. hunger towards foods which
when consumed will satisfy the
needs. Learning theorists infers that
the response of satisfaction feeding
(feeling) reinforces the relationship
between drive (internal stimulus) and
the drive reducing stimulus and
related cues (stimuli coming from
marketing and social environment)
when the consumer learn to
associate connections between the
stimulus and response, it becomes a
habit and leads to repeat purchase.
3. Psychoanalytical Model
This model is based on the work
of the psychologists who were
concerned with personality, They
were of the view that human needs
and motives operates at the
conscious and subconscious levels.
According to Sigmunt Freud human
behaviour (personality) is the
outcome of a “id” – the source of all
physic energy which drives to act.
(Super ego) – the internal
representation of what society
approves (ego) the conscious
directing “id” impulse to find
satisfaction in a socially accepted
manner.
4. Sociological Model
In this model, the buyer is a part
of the institution called society, Since
he is living in a society, he gets
influenced by it and also influences
 others. The buyer plays many roles A. Input variable – Includes three
as part of various formal and types of stimuli namely:
informal organizations. Such
a) Significant stimuli – shows
interaction leaves on impression on
the physical tangible
him and plays a role in influencing
characteristics of the
his buying behaviour. An individual
product namely: price,
will adopt the role suitable to
quality, uniqueness,
conform to the style and behavioural
availability and service
pattern of the social class he belongs
rendered
to.
b) Symbolic stimuli – The
With the evolution of consumer verbal or visual
behaviour study, newer approaches characteristics of the
were used to understand what product.
influences consumer behaviour and this c) Social stimuli – Inputs are
was said to be contemporary. These provided by family, friends,
models on views differed from the social groups, peers or
transactional model because they are social class
focused on the decision process
adopted by consumers and concepts
borrowed from behavioural science field B. Hypothetical constructs
(Perceptual and Learning) – It
1. Howard – Sheth Model
includes psychological variables
This model tries to represents the
influencing consumer behaviour
rational broad choice behaviour by
during the decision making
buyer when faced with situations
process like motives, attitudes
where information is incomplete and
and perception. Two categories
abilities are limited. In this model four
under this model are:
sets of variable are considered:
1. Perceptual – Helps in
a. Input variables
gathering and processing
b. Hypothetical constructions
information for selecting a brand.
(Perceptual and Learning)
Under this category there are
c. Output Variables
various factors that influence
d. External/exogenous variables
interpretation or perception.
  Stimulus Ambiguity – This pressure which may lead to the
occurs when the consumer restrain or inhibition on the
consist completely purchase of the preferred brand.
understand or interpret the In most cases, price in the
stimuli he has received nor deciding factor is a purchase.
does he know how to
respond.
C. Output Variable – These are
 Perceptual Bias – Occurs
the ultimate response of a
whenever information is
consumer. It is the purchase
altered in modified to
decision. Favourable post
conform to his needs,
purchase evaluation will lead to
desires and experiences.
position attitude thus increasing
 Search for information –
brand understanding the
actively seeks information
hierarchy of output variables and
on the brand and /or other
sequence in this order.
features associated with it.
 Attention – This is based
2. Learning Construct – This is
on the importance of
where buyer forms attitudes,
individuals information
opinion and knowledge
gathered and such
influencing buying decision also
information is accepted
includes evaluation after
after the buyer has seen
purchase. An intelligent customer
the product or stimulus.
must know how to manage
mental rules necessary in  Comprehension – This

matching and ranking all option deals with the amount of

available. information that the buyer

Predisposition refers to a has regarding the brand

preferred brand and customer that is being stored and

usually expresses an attitude process in his mind.

towards it.  Cognition – This refers to

Inhibitors refers to the the evaluation of the

environmental variables like price brand’s potential to satisfy

and time. Such variable may his motives. It is creating

establish a certain degree of

 an attitude towards the between the individual as a
product. system with stimuli as the input to
 Intention – refers to the the system and the individual’s
brand which a buyer behaviour as the output of the
intends to buy. system.
 Purchase behaviour – This
reflects the buyers predict
According to this model four (4)
position to buy as modified
different areas/field of the
by environmental factors
decision process are present.
as time and price.
Area 1 – Consumer Attitude
Area 2 – Search and Evaluation
D. External/ Exogenous Variables
Area 3 – Act of Purchase
– As the word suggest there are
Area 4 – Feedback
factors that includes social class,
culture, financial capacity and
Here is the output or result of
subculture. These indirectly
area becomes the input for area
influence the consumer but the
2 and so on. This model suggests
level of influence varies from on
that messages from the 1st
consumer to another. Advantage
influences the predisposition of
external in nature it still plays a
the consumer towards the
significant influence in the buyers
product.
decision.

The Nicosia Model

Generalization:
This was developed by
There are many models of consumer
F.M. Nicosia and is a model of
behaviour. Traditional model which
purchase decision making by
covers economic, learning,
either a group or a solo
psychoanalytic and sociological models.
individual. It strives to explain the
These models explain the buying
buying behaviour by creating a
decision process and consumer
link between the organization and
behaviour. It starts with unsatisfied
potential customer.
need. Search will occur after this and
The analysis is centered
consumer evaluates the available
choices and try to select the best one. It
is only after evaluation that purchase will
take place after considering the price
and brand quality.