MM 413 – CONSUMER BEHAVIOR elements; namely, Knowledge, Affect, and

Midterm Handouts Behavior.

Prepared by: Mr. Joseph Ivan P. Lugo - both a decision process and a physical
activity that individuals engage in when
CHAPTER ONE: INTRODUCTION TO evaluating, acquiring, using, and disposing
CONSUMER BEHAVIOR of goods and services to satisfy one’s need
and desire.
I. CUSTOMERS AND CONSUMERS - rationalizes the reasons and logic that bring
Customer – regarded as the “king” of the business. about purchasing decisions and
They are the cause and purpose of all production and consumption patterns.
marketing activities. Without customers, businesses - Aims to describe and enlighten the processes
would surely fail. through which buyers make decisions.
- The process which deals with the various
Consumer – refers to any person who purchases stages an individual goes through prior to the
available goods and services for personal acquisition of certain goods and/or services.
consumption. Their attitude, behavior, desires, and
feedbacks play a significant part with respect to the An intelligent consumer decides on the basis of
marketing plans and policies of any business the following parameters:
venture. • What to buy?
• When to buy?
Despite their similarities and differences, the table
below best illustrates the comparisons between • Where to buy?
these two terms. • How to buy?
• How much to spend?
CUSTOMER CONSUMER
Classification Purchaser End-user
May be in the
business of
selling similar
products; Simply for
Trading/reselling therefore he personal
can purchase it consumption.
wholesale for
the purpose of
retail selling.
Yes – if bought
for personal
use.
Purchasing Yes
No – if it was
given by
someone else
Reselling,
Purpose gifting, or Consumption
consumption
May or may not
be paid by
Paid by consumer –
Payment
customer specifically if it
was given as a
gift
Personal
Individual or Individual or a III. NATURE OF CONSUMER BEHAVIOR
organization group of people • Consumer behavior is subjective, and it is
both psychological and socially influenced.
II. CONSUMER BEHAVIOR • After every purchase, consumers feel
satisfaction or dissatisfaction, evaluate the
For purposes of discussion, the term Consumer products and services, and sometimes give
Behavior is synonymously related to the following feedback or complaints. Negative
jargons: experiences might be shared on social media.
• Individual Buyer Behavior • Consumer behavior involves thoughts,
• End-User Behavior feelings, and actions.
• Consumer Buying Behavior • It covers a wide range, involves multiple
people, and changes over time.
Consumer Behavior • It includes mental and emotional processes
- defined as the “interplay” of forces that takes related to buying and using products and
place during a consumption process, within services to meet personal needs and wants.
a consumer’s self and his environment. This • Consumer behavior reflects all decisions
interaction takes place between three from start to finish, including acquisition,
use, and disposal of goods over time.
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 • It also involves decision-making processes • Personal Motivation • Attitudes
before and after these actions. • Involvement • Self-concept
• Furthermore, consumer behavior is a • Perception • Personality
methodical practice with reference to the • Learning • Decision Making
buying decisions of the customers. Except for • Memory
impulse buying - which normally happens
from time to time, having a process is much On the other hand, environmental determinants
more advantageous as it makes better pertain to external influences surrounding an
decisions and minimizes regret. individual and includes sociological,
• Consumer behavior is influenced by anthropological, and economic components such as:
personal, psychological, situational, social, • Family
cultural, and advertising factors. • Social Class
• Social Groups • Culture
• Consumers have different behaviors based • Reference Groups
on lifestyle, habits, and location. Rural • Sub-Culture
• National and • Cross-Culture
consumers may be more traditional, while Regional Influences
urban consumers are more progressive.
• Income also affects buying behavior; not all IV. SCOPE AND APPLICATION OF
city dwellers are wealthy. CONSUMER BEHAVIOR.
• Consumer behavior is a “spread effect”
wherein our buying behavior may be Before deciding, a consumer should answer all or a
influenced by others, especially of those we combination of the following questions;
admire.
• Consumer behavior also has a “reflect status” • What?
as seen in consumers who own luxury items • Why? • Where?
who are conscious of their image as it • How? • How much?
indicates social standing. • How often?
• When?
• Consumer behavior is subject to age. It
changes with age, education, and income. People normally purchase goods and services due to
Preferences and eating habits evolve, often the following reasons;
becoming more health-conscious with age.
• Product awareness is crucial, influenced by • There is a need
marketing, advertising, and information
• Future use
searches. Product ratings are very helpful as
• Sale
well.
• Social Status
• Brand loyalty is common if consumers are
• Gifting Purposes
satisfied with a product’s quality and
performance.
Questions that reflect the consumer behavior:
1. How do people make decisions to utilize their
The buying process comprises of the
resources in terms of time, money, and effort?
following phases:
a. What do consumers buy?
✓ Need Identification
i. Products or services?
✓ Information Search
b. What makes them buy?
✓ Alternative Evaluation.
i. Is it because of a need? Or
✓ Purchase Decision.
want?
✓ Post-Purchase Evaluation
c. When are these items bought?
i. Ordinary times or holiday
Consumer behavior deals with issues related to:
seasons?
✓ Cognition: Knowledge processing
d. Where are these items bought?
and interpretation of information.
i. Local or foreign?
✓ Affect: Feelings and emotions
ii. Physical stores or websites?
toward a stimulus.
e. What is the frequency of buying?
✓ Behavior: Visible actions, like
i. Time interval -regular basis
deciding whether to buy.
or occasional?
f. How often are they used?
i. Frequency of use - routinely
Consumption behaviors may be viewed against the
or random?
framework of individual and environmental
2. How do people dispose of their newly acquired
determinants as described by the following:
purchases?
Individual determinants. Pertain to an • Consume it? • Sell it?
individual’s internal self. It includes the following • Store it? • Throw it away?
psychological components. • Give it? • Rent it?

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HUMAN NEEDS VS. HUMAN WANTS
Human needs are:
• Goods and services necessary to sustain life.
• Basic needs.
• Needed from birth till death for survival.
• Food -- an example of the most basic need of
all living creatures.
Human wants to refer to:
• Goods are services that are not necessarily
needed for survival but are nonetheless
sought to improve the quality of living.
• Aside from comfort, they are sometimes
associated with status symbols, luxury and
prestige.
• Examples: cars and jewelries.
To simplify -- a NEED is something that you’ve got
to have. A WANT is something that you would like to
have.
CONSUMER BEHAVIOR & FACTORS THAT
INFLUENCE DEMAND
1. Income – an increase in salary/allowance
triggers an increase in one’s purchasing
power. (i.e, 37 coffee vs. coffee break)
2. Climatic/Seasonal Condition – consumers
would naturally purchase commodities
based on what is needed at a particular time
frame. (i.e, halo-halo during summer,
flowers during valentines)
3. Price of Related Goods
a. Complementary Goods – goods
purchased along with.. (coffee and
sugar)
b. Substitute Goods – goods purchased
instead of.. (coffee and tea)
4. Price Expectations – to buy more of a
product in case there’s an expected price
increase of the said good. (i.e gasoline for
cars)
5. Taste and preference of customers –
commonly based on what’s ‘trending’.
To simplify, consumer behavior deals with the
buying behavior of individuals based on their
purchasing and consumption experience. When
there is a need, there is a demand.
MARKETS IN CONTEXT
TYPES OF MARKETS:
• Physical Marketplace
• Virtual Market
• Shopping Centers
• Online (internet)
Retail – engages the sale of commodities from a
single point of purchase precisely to a client/buyer
who aims to make use of that product.
Brick-And-Mortar Retail Store – a firm that
occupies or rents space for retail stores, factory
production facilities, or warehouses for its
operations.
Internet Shopping – buying of products and/or
services over the internet.
Catalogue – offers a list of goods and services on sale
usually with photos, descriptions, and
corresponding prices in printed format. E-catalogs
are also available nowadays.
TYPES OF RETAIL STORES
• Department Stores – sells a wide range of
merchandise arranged by category in
different sections. (i.e, SM, Robinsons Dept.
Store)
• Groceries and Supermarkets – sells all types
of food, beverages, home products, clothing,
and consumer electronics. (i.e, Shopwise,
Puregold, Prince)
• Warehouse Retailers – large warehouse-type
facility stocked with large variety of products
packed in large quantities. (i.e, S&R,
Landers)
• Specialty Stores – specializes in a specific
category of products. (i.e, Toy Kingdom,
Yamaha)
• Convenience Stores – Sells a limited range of
grocery merchandise. Often referred to as a
mini grocery store. (i.e, 7/11, Quixmart,
GoMart)
• Discount Stores – Sells a variety of products
considered surplus, overruns, phased out
models, broken, slightly damaged
merchandise offered at a discount.
• Mobile Retailer/Mobile Commerce – Uses
the internet and smartphone apps/platforms
to process retail transactions.
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