MARKETING MANAGEMENT

MOIDULE 3. CONSUMER BUYING BEHAVIOR

OVERVIEW

Consumer buying behavior is comprised of all considerations a person takes when deciding
what products to choose or buy, where to buy the, when to buy the product, how the product will
purchase, and why particular products or brand was chosen. This also includes other factors like buyers’
characteristics that influence a person’s decision to buy a certain product or avail of a particular service.
Marketing decisions tend to be better if the marketer is fully aware of the importance of consumer
behavior. Adopting the marketing concept begins with the identifying the needs of the consumer, and
this is better achieved through a study of consumer behavior.

This module will present the stages by which the consumer undertakes when deciding which
product or services to buy. Also included in this module is discussion on how behavioral sciences can
help to understand the buying process.

Consumers make countless buying decisions in terms of what product or brand they will avail or
the type of services that they wish to have every day. Consumers’ buying decisions, however, are
affected by some factors. It is for this reason that companies conduct a lot of research to find out what
products or services the market demands or looks for, where consumers usually purchase products that
will satisfy their needs and wants, and what type of promotions influence them to buy and at what
price.

This topic on consumer buying behavior looks into the various factors that influence purchasing
decisions, whether the company caters to the consumer market or industrial market.

LEARNING OBJECTIVES:

At the end of this module, students are expected to:

1. Compare the different factors affecting buying decisions;

2. Analyze what influences the market’s purchasing decisions;
3. Identify the industrial market and its characteristics; and
4. Discuss the types of buying situations and the participants in the buying center.

DISCUSSIONS:

1. PATTERN OF CONSUMER BUYING BEHAVIOR

For a buyer to decide on the kind of product he wants to purchase, some stimuli trigger his
decisions. These stimuli consist of the different control environmental factors like the marketing
mix-product, price, place, and promotions, and uncontrollable factors like demographic.
Economic, technological, political, socio-cultural, and climate.
According to Kotler and Armstrong [2009], marketers must figure out what is in the buyer’s
block box, which has started after considering the stimuli. The buyer’s black box, where the
stimuli entered, involves the responses of customers for the different stimuli which will form the
 basis of the customers’ purchase decisions. It also consists of the buyer’s characteristics which
describe how the buyer reacts to certain environmental stimuli.
2. FARTORS AFFECTING CONSUMER BUYING BEHAVIOR
1. Cultural Factors
a. Culture
b. Sub-culture
c. Social class

2. Social Factors
a. Reference group
b. Family
c. Roles and status

3. Personal Factors
a. Age and life cycle
b. Occupation
c. Economic situation
d. Lifestyle
e. Personality and self-concept

4. Psychological Factor
a. Motivation
b. Perception
c. Learning

CULTURAL FACTORS

Cultural factor has the broadest impact on consumer buying behavior. This represents the basic
values of an individual including his beliefs and behavior, which are learned from family, schools, and
other institutions in society.

Because of cultural differences, companies must be able to fully understand their market and be
able to come up with a marketing program fitted to the preferences of their target audience. Within a
particular culture are various sub-culture or groups of individuals with common practices, beliefs,
dialect, or orientation, and belong to a similar geographical location. A specific example is the regional
groups in the Philippines. In the Philippines, there are Bicolano’s, Kapampangan’s, Ilocanos, Cebuano’s,
and many others. Each of these groups has its common practices, traits, and behaviors that are unique
to its respective group.

Society is also made up of a class structure known as social class. This is composed of individuals
with the same interests, behaviors, as well as values. Individuals in the same social class tend to dress in
the manner speak the same language, and engage in particular activities. Society’s social class is
determined by income, level of education, and wealth.
FOUR CATEGORIES OF SOCIAL CLASS STRUCTURE IN THE PHILIPPINES [LLANES AND JURADO]:

1. Class A. This is equivalent to the upper-upper stratum in the United States. These are the elite
or people who are wealthy or those from well-known families. They own several businesses,
houses, and cars, and can travel anywhere at any given time. Mostly, their houses are filled with
amenities.
2. Class B. people from this class are professionals and entrepreneurs. They may also have
comfortable lifestyle and good income. They may also have a comfortable lifestyle and good
income. They live in well-furnished own houses, condominium units, or well-furnished houses
in known subdivisions or villages, possessing modern household conveniences.
3. Class C. This is a middle class, which is composed of workers who live in modest residences, and
if located in the city are often rented. In most situations, people who belong to class C do not
have the conveniences found in the homes of those in Class B. The middle class is composed of
workers who often live-in rented apartments and earn average wages.
4. Class D. A big majority of people belong to Class D. This refers to the upper-lower class made
up of skilled and unskilled laborers, low-waged earners. These are those considered doing a
mental job for minimal pay, a big majority of our people belongs to the Class D. Sometimes,
these individuals are lucky to be given regular jobs or regular source of income. Most of these
workers are paid on daily basis and that means-No work, No pay. It is hard for this group to
improve their standard of living with limited opportunities to get employed and the cost of
education is high. It is with this condition that most companies or institutions focus their
corporate social responsibility [CSR] programs toward helping this group improve their standard
of living.

Some marketing man include people “with no visible means of livelihood” beggars in this group.
Whereas, others prefer to label the unemployed slum members in a separate category known as
class X [lower-lower]:

SOCIAL FACTORS

Consumer buying behavior is also influenced by socials factors such as family, reference groups,
social roles and social status.

Reference groups refers to groups that can strongly influence the attitude and character of a
person. The group, which a person wishes to be part of, is referred to as the aspirational group. An
example of this is when a teenage wishes to be a member of a professional photography club in the
future. A membership group is where a person is a member. This group has a direct influence on the
person’s decisions especially when it comes to his/her brand choice.

Family members are strong buying market. Family is the most important consumer buying
organization in society. Parents always influence the brand choice of costumers, especially young ones.
Companies are expected to know the various purchasing roles of each member of the family. For
instance, finding out who among the family members has a strong decision power when it comes to
availing education-related products or services, or who decides on what household appliances to buy.
Normally, in the are of food consumption, the wife is given the authority to decide. Children are also
good members of the family to consider as the target markets. Most travel destinations or vacation is
availed by the family because of their suggestions.

The different activities expected from a person are known as roles. An individual role carries a
particular stratus given by society. An individual role carries a particular status given by society. Status is
the esteem provided by society concerning the of an individual. A person purchases products that
reflect his/her role and status. Consider the various roles played by a father who works as a

Department manager. In his office, he is someone who leads his teams; at home, he plays the role of a
loving father and dedicated husband; toward his parents, he plays the role of a son; and toward his
favorite basketball team, he plays the role of an avid fan. As a department manager, he tends to
purchase clothes, which reflect his role and status. His choice of a brand for a pen or bag also reflects
his roles and status. As a father, he must be careful in his choice of television programs, especially if he
watches together with his young children.

PERSONAL FACTOR

People, depending on their age and position in the life cycle stage, desire different products.

The family life cycle includes being adolescent, single, married, a couple without child or couple
with a child or children, and senior citizens or those in their 60 years and above.

The elderly prefers mellow music and serene places where they can truly relax. Retirees and
upscale individuals are the target market for vacation packages, especially luxury cruises. Newlyweds
are the best for appliances and condominiums or housing investment. On the other hand, teenagers
prefer upbeat music.

The income level influences the choice of products or services of the market. The lifestyle of a
person changes as income improves. For instance, a lot of people now are becoming health-conscious
than yogurt houses and various tea kiosks in different places, especially in Malls, are sprouting. They are
also becoming more conscious about their grooming and physique that they frequent facial clinics, spa,
and gym to make sure that their physical health is maintained. Because of this, part of their income is
saved for this purpose.

Personality is the totality of a person’s being, consisting of many traits such as being aggressive,
outspoken, dominant, and having self-confidence among others.

PSYCHOLOGICAL FACTOR

Psychological factors cover those different areas that influence the market such as their
motivation level, beliefs, and way of looking at things or situations.

Motivation refers to what stimulates a person to purchase a product or avail a service. A

person’s level of motivation can be associated with the different levels of need as identified by Abraham
Maslow in his hierarchy of needs.
 Another psychological factors that affect buyers’ decision is their perception about a product, a
service, or a situation. Perception is a person’s interpretation of the information around him that helps
him form a meaningful scenario. People learn from their actions. Learning involves changes in the
person’s attitude according to his experience. If a person’s experience in using a particular brand of
laptop or mobile phone is satisfying, he will probably choose to use or buy more products from that
brand and will even be promoting the brand unconsciously through word of mouth.

BUYER’S DECISION PROCESS

The way consumers purchase a specific product is strongly influenced by cultural, social,
personal, and psychological factors. These factors are not controlled by any marketer; however,
companies must consider all of these influences in drafting any marketing program so it can better serve
its target market.

1. Need recognition
The initial step of a person in deciding to purchase a product is to recognize that he
has a need that has to be met. A person’s desire for a product may be influenced by
stimuli within himself, like the feeling of hunger or exhaustion that will be satisfied by food
or rest. The need can also be influenced by external stimuli like seeing a classmate with
the latest cell phone model or reading a print and showing amazing features of a laptop.
These stimuli can make a person consider purchasing a product.

2. Information search
After recognizing the need or problem and identifying the product that will satisfy
the need, the next step in the buying decision process is the search information related to
the product. A well-informed customer may be able to purchase better products for the
same price.
Information search is not an easy task; one has to go through to time-consuming
research, even spending on the process of looking for information. There are several
sources of information that are available to consumers. The primary sources of
information that are personal experiences, reference groups, acquaintances, businesses, or
professionals. Business sources include advertising, salespeople, websites, dealers, or
distributors, while professional sources of information include physicians, lawyers,
teachers, among others.

3. Evaluation of Alternatives
This involves using the gathered information to evaluate alternative brands in the
choice set. To effectively evaluate alternatives, consumers must; [a] synthesize
information; [b] establish decision criteria; [c] determine the type of alternatives, and [d]
compare alternatives.

4. Purchase Decision
 This is the stage where customers choose the particular product to purchase from
among the many alternative brands. However, two factors may affect their purchase
decisions. One is the perception or attitude of others about the customer’s brand choice.
This happens when a member of the family disapproves of the chosen brand because of its
price, quality, features, or other factors that contribute to the customer’s change of
purchase decision. Another factor is the unexpected situation, in the same way when a
competing brand offers a much lower price or a new product is launched in the market
offering better features, price, or design.

5. Post-Purchase Behavior
This is the last stage in the buying. Decision process. Post – purchase evaluation
can be a learning experience for consumers. Companies must give importance to the pos-
purchase evaluation of consumers because it will determine whether they are satisfied or
not with the purchased product. A customer shows delight when the product he/she has
purchase exceeds his/her level of expectation. On the contrary, a customer becomes
disappointed when the product purchased falls short of his/her expectation. A customer is
satisfied when the product he/she purchased meets his/her expectations.

INDUSTRIAL MARKET AND BUYING BEHAVIOR

Aside from the consumer market that purchases products for its consumption, there also
exists the industrial market, which is a bigger market in terms of the quantity purchased. Industrial
market or business-to-business [B2B] market purchases products for further production or processing
and manufacturing new products.

The Industrial or B2B market includes the following:

1. INDUSTRIAL MARKET- is composed of industries such as manufacturing, mining, banking, retail

trade, wholesale trade, services, transportation, public utilities, and communications.
2. RESELLERS – are individuals who buy goods and resell them to end- users at a profit. Examples
of resellers are convenience stores, grocery stores, supermarkets, and department stores.
3. GOVERNMENT AND INSTITUTIONAL MARKET- includes the local and national government
agencies and the public and private entities.

CHARACTERISTICS OF INDUSTRIAL MARKET

1. CLOSE SUPPLIER AND CUSTOMER RELATIONSHIP

The industrial market, business relationships are often close, and lasting a business
relationship starts with a sale transaction. A good business relationship is created and
maintained by directing the company’s marketing activities toward creating and maintaining
successful exchanges with the customers [Hutt and Speh, 2013].
2. DERIVED DEMAND
The industrial market’s demand is derived. In other words, the demand for goods and
services is derived from the demand of the consumers. Thus, if consumers demand cars
 decreases, car manufacturers’ demand for tires, car paints, car air condition, and other car
accessories will also drop.

3. DIRECT PURCHASING
Salespeople from the manufacturing companies go to the industrial market for product
sales. The industrial market normally purchases products in volume. Thus, companies provide
buyers [firms] technical assistance before, during, and after-sales are made.

4. GEOGRAPHICALLY CONCENTRATED BUYERS

This allows manufacturers to easily reach their target market. When buyers are
concentrated geographically, manufacturers use more personal selling; while if buyers are
dispersed, media promotion is the best medium to use. A beauty consultant in a department
store engages in personal selling when she describes the benefits of a particular cosmetic brand
to a customer with the hope that the customer will be persuaded to purchase. Other personal
selling example includes cars, condominium units, equipment, raw materials, and other
products sold by a salesperson of a business enterprise or company to another industrial
customer.

5. INELASTIC DEMAND
Many companies have an inelastic demand. This means that the companies demand
business products, which are not affected by the price change. For example, a decrease in price
of car tires will not cause the manufacturing companies to buy more car tires.

6. LARGER BUT FEWER BUYER

The industrial market normally interacts with fewer but larger buyers. Buyers purchase
in huge product quantity.

7. LEASING. This is common to most firms in the industrial market. Before, only large equipment
or expensive types of machinery were rented out, such as construction equipment and
warehouses. Nowadays, industrial market players like suppliers and users lease other items
such as delivery trucks for product distribution and storage houses for inventories.
There are advantages when an industrial player, either buyers or sellers, leases. Some
of these advantages are [LLANES and JURADO,1982]:
a. Through leasing, a firm can still use its investment capital for other purposes.
b. Leasing is best for firms that have temporary needs for equipment or storage,
particularly when there is construction going on.
c. Leasing is a good decision for firms that have small investments and firms that are new
in the industry or just starting. This means that the firm need not have to immediately
buy equipment or machinery.
d. Leasing is also an effective way of getting distribution for new product. Thus, potential
users may be more willing to rent than buy.
8. PROFESSIONAL PURCHASING
Unlike the consumer market, wherein purchasing decisions can be done by anyone
without undergoing training, purchasing and selling in the industrial market necessitate either
 the firms’ seller or buyer to undergo professional training to effectively close a sale. Expertise in
the area of sales or business is a must.
9. RECIPROCITY
This means the company will purchase products from a firm [seller] only if the seller will
also purchase products from the buyer. Firms practice reciprocity as a solution to a declining
sales volume.

10. SEVERAL BUYING INFLUENCES

In the industrial market, a team of buyers in the firm normally influences buying
decisions.

TYPES OF BUYING SITUATION

1. Straight Rebuy- describes a situation where a firm reorders regularly.

2. Modified Rebuy – describes a buying decision where a firm wants to make some changes to
product specifications, process, delivery or payment requirements, and other terms.
3. System Purchase – involves a total solution to the buyer’s problem of not making separate
purchases and decisions.
4. New-Task Buying – refers to purchasing products for the first time.

PARTICIPANTS IN THE BUYING CENTER

The group of people within an organization that makes purchase decisions is said to form the
buying center. Gilbert Harell [2002] stated that there are sis participants in the buying center, namely:

1. The Gatekeeper – refers to the first person that sales representative gets in contact with.
Gatekeepers control the flow of business information into the buying center or firm.
2. Information seeker – searches for data that can be used during the purchasing process.
3. Advocates- are people who influence the buying center decisions. Their influence is obtained
from their expertise on a particular topic and with their skills in interacting with other people
outside the organization.
4. Users- are members of the organization who will use the product. They initiate the purchase of
the product and provide information as to specifications.
5. Decision makers- are people who choose and approve the suppliers or providers of products.
6. Buyers- are people who have the authority to contact suppliers and negotiate terms for
products to be ordered or purchased.

EVALUATION;

ACTIVITY #1. Discussion Questions:

1. Enumerate the different factors that influence consumer buying behavior and explain each.
2. How does the industrial market differ from the consumer market?
ACTIVITY #2. Directions: identify the following what is being asked. Write the word or group of words
being referred.

1. This represents the basic values of an individual including his beliefs and behavior, which are
learned from family, schools, and other institutions in society.
2. This is equivalent to the upper-upper stratum in the United States.
3. Refers to the groups that can strongly influence the attitude and character of a person.
4. The totality of a person’s being, consisting of many traits such as being aggressive, outspoken,
dominant, and having self-confidence among others.
5. Refers to what stimulates a person to purchase a product or avail a service.
6. Composed of industries such as manufacturing, mining, banking, retail trade, wholesale trade,
services, transportation, public utilities, and communications.
7. Includes the local and national government agencies and the public and private entities.
8. This means the company will purchase products from a firm [seller] only if the seller will also
purchase products from the buyer.
9. This is common to most firms in the industrial market.
10. People who have the authority to contact suppliers and negotiate terms for products to be
ordered or purchased.
11. Members of the organization who will use the product.
12. People who influence the buying center decision.
13. Comprised of all considerations a person takes when deciding what product to choose or buy,
where to buy, when to buy, how the product will be purchased and why the particular product
or brand was chosen.
14. This refers to the upper-lower class made up of skilled and unskilled laborers, low-waged
earners.
15. A person’s interpretation of the information around him that helps him form a meaningful
scenario.

Prepared by:

PRESCILA GABITAN JARO

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