1.

Consumer Behavior
Encompasses all the acts of individuals that involve buying and using of products,
including the decision processes that precede and determine these acts.
The study of consumer behavior helps firms and organizations improve their
marketing strategies by understanding issues such as:
The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products, and retailers);
The psychology of how the consumer is influenced by his or her environment
(e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other marketing
decisions;
Limitations in consumer knowledge or information processing abilities
influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer;
How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.

2. Social Factors that Influence Buying Decisions

I.

Reference Group
Reference group is a group in society that influences an individuals
purchasing behavior. These groups are family, neighbors, peer groups, etc.
Reference group influence can extend to the decision to purchase a product as
well as the choice of a particular brand.
Consumer behavior is determined by the reference groups to which consumers
belong or aspire to belong. In selecting products or changing brands, consumers
are more influenced by word-of-mouth information from categories of reference
groups.
A. Direct Reference groups are face-to-face membership groups that touch
peoples lives directly.
1. Primary membership groups include all groups with which people
interact regularly in an informal face-to-face manner, such as family,
friends, and co-workers.
2. Secondary membership groups less interaction and more formal. These
include professional groups, co-members in clubs, religious groups.
B. Indirect Reference Groups
1. Aspiration groups are those that we would like to join. In joining, one has
to conform to the norms of a certain groups. For example, a person who
wants to be elected in the public office may begin to dress more

conservatively in order to be accepted by the voters and other influential

people.
2. Nonaspirational reference groups or dissociative groups are groups with
which an individual does not want to associate.
II.

Family and Household influence

A family is a group of two or more people related by blood, or marriage living
together in a household. The most influential primary reference group are the
family members. In the buyers life there is the family of orientation consisting of
ones parents. From parents, a person acquires an orientation toward religion,
politics, and economics and a sense of personal ambition, self-worth and love. A
household is a broader concept than a family which includes: a single person, a
family, other unrelated persons who occupy a housing unit.
The family is the most important consumer-buying organization in society.
Marketers relative influence of the husband, wife and children in the purchase of a
large variety of products and services. This buying behavior vary widely in
different countries and social classes. The marketers have to research patterns in
the particular target market.
Four Types of Decision-Making Structures
1. Automatic- husband and wife make decision roughly on equal number of
times when buying appliances, cars, real estate.

2. Wife-dominant- it is the wife who most of the time makes the majority of
the decisions when buying home furnishings like curtains, displays
products, cleaning products, food items.
3. Husband-dominant- the husband makes the majority of the dicisions with
little or no input from the wife.
4. Syncratic- husband and wife jointly make the decisions on schooling,
housing, vacation, leisure activities.
III.

Roles and Statuses

We choose products that communicate with our role and status in the society.
Each role carries a status. Thus, company executives drives prestige cars, wear
Rolex watches and go to exclusive restaurants. Marketers are aware of the status
symbols of products and brands. Status Symbol may vary depending in the social
classes and geography. For example, in the Philippines having swimming pool at
home is a status symbol, sending children to private schools is a status symbol
among the Chinese people.

3. Decision Making-Process
I.

Stimulus

A stimulus is any unit of input affecting the five senses: sight, smell, taste,
touch, and hearing.
A. Internal Stimuli- A persons normal needs, such as hunger, and thirst.
When these needs are stimulated, the person find means to satisfy them
such as food and water.
B. External Stimuli- Stem from sources outside ones self. These stimuli
might be the perfume worn by a friend, a brand name of jeans being
advertised on television, or design of a package.
II.

Recognition of Problem
When a consumer purchases toilet tissue, coffee or detergent soap, the decision
making process is not very much affected. But if a person purchase a car, a
television set or a refrigerator, which is obviously involves a more complex
purchase, then there is a problem that you need to search for information. Such
problems would be the price, whether you buy brand new or second-hand, style of
the product, and so forth.
A consumers exposure to such stimulus may trigger problem recognition. And
problem recognition is experienced when controlled with an imbalance between
actual and desired states. A desired state reflects a need or want.
A. Need- Anything an individual depends on to function efficiently. Needs are
the roots of all human behavior, for without need there would be no
behavior patterns.
B. Want- Exist when someone has an unfulfilled need and has determined
that a product will satisfy it.

III.

Information Search

After recognizing a problem, a consumer may or may not search for more
information. That decision depends in the perceived benefits (best price, latest
model, getting ultimate satisfaction) of the search versus its perceived cost (time
and expense of searching, and the psychological cost of processing information).
The information search can occur internally, externally or both.
1. Internal information search- is the process of recalling post information
stored in the memory which stems largely from previous experience with a
product.
2. External information search- seeks information in the outside

environment. Two basic types of external information sources are:

a. Nonmarketing-controlled information source- is not associated with
marketers promoting a product.
b. Marketing-controlled information source- is a product information
source that originates with marketers promoting the product.
IV.

Evaluation of Alternatives
Narrowing down number of choices. Consumer should choose the most
important attributes, weighs the alternatives and decide which is the best: Which
one should he/she choose to purchase? Which one is more practical to own?

V.

Purchase
The consumer may choose a particular brand first and then the place from
which he or she is going to buy the product or may choose the place first and then
the brands, or may choose both simultaneously, such as when seeing an attractive
blouse in a window display. Choice of a retail store depends on the stores
location, product assortment, prices, sales people, services rendered, stores
ambiance and the consumers particular shopping orientation and perceived risks.
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The great majority of purchases are not planned in advance. 66 % of

purchasing decisions are made right in the store. These in store purchases
decisions share one or more of the following characteristics:
A. Spontaneity- These purchases are often stimulated by in store advertising
materials or sales people, and the consumer gets the urge to buy
immediately.
B. Excitement- consumers often get a thrill from impulsive buying decision.
C. Compulsion- for some consumers, the excitement outweighs all other
considerations.
D. Disregard for Consequences- often to their eventual dismay, consumers
sometimes make impulsive purchases without considering the
consequences.
VI.

Postpurchase Behavior
A person may or may not buy the product but if he or she ever does, the
expectations on the product would be very high. There are two things to
remember in this stage: When expectations are met by the purchase, brand
loyalty develops and when expectations are not satisfied, the consumer will
look and try for another brand of product.

4. Cultural, Personal, and Psychological Factors that influence Consumer Behavior

The Persons actions and choices are influenced by a variety of internal forces,
including his or her needs and motives, perception, learning, beliefs and attitudes. A buyers
decisions are also influenced by personal characteristics, in particular the buyers age and
life-cycle stage, occupational, economic circumstances, lifestyle, personality, and selfconcept.

Cultural Factors Influencing Consumer Behavior

I.

Culture
Encompasses all things, abilities, ideas, and beliefs, that human being use, do,
know and that one generation of a society transmits to the next.
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It is the most fundamental determinant of the persons wants and behavior.

While growing we acquire a set of values, perceptions, preferences and behaviors
from our families including other institutions. We also tend to pick up other values
such as family, personal relationships, obedience, trust, respect for elders, and
filial piety.
Some cultural shifts that affect consumer buying behavior today include:

II.

From a saving ethic to spending freely and credit buying

From a work ethic to self-indulgence and having fun
From a husband domination to equal husband-wife roles
Emphasis on quantity goods to emphasis on quality of life
From self-reliance to reliance on government
From postpones gratification to immediate gratification

Subculture
It is a homogeneous group of people who share elements of the overall culture
as well as unique element of their own group. In the Philippines, Asian people are
more predominant, by responding to this sizeable subculture, business firms sell
products to serve their needs. In Metro Manila alone, there are various restaurants
that cater to Chinese, Japanese, Koreans, Thais, Vietnamese nationals.

III.

Social Class
Social class is a group of people who have approximately equal social position
as viewed by others in the society.
Philippine Social Class Structure:

A. Class A- these are the social elite, live on inherited wealth and come from

well-known, moneyed families.

B. Class B- these are professionals, business people, corporate executives with

very comfortable income. They are also called new rich.

C. Class C- this is the middle class composed of white-and-blue collar workers
who earn average pay, live in modest residences which is located in urban
areas, are often rented.
D. Class D- the upper-lower class refer to the working poor who perform
unskilled and mental jobs for minimal wages and some casual paid on a daily
basis.

Personal Factors Influencing Consumer Behavior

I.

Age and Life-cycle stage

People buy different goods and services over their lifetime. They eat baby food
in the early years, eat most food in the growing and mature years, and special diets
in later years. Also related is taste and preferences of people in clothes, furniture,
recreation, and music. Consumption is also shape by the stage of the family
lifecycle. Most marketers choose life-cycle groups as their target market.

II.

Occupation
A persons occupation also influences his or her consumption pattern. A
construction worker will buy work clothes, work shoes, and ride in a bus or
jeepney. A doctor will buy expensive suits, air travel, country club membership,
and a prestige car. Marketers try to identify the occupational groups that have
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above-average interest in their products for certain occupational groups. Computer

companies will design computer software for product mangers, engineers,
lawyers, and physicians.
III.

Economic Circumstances
Peoples economic circumstances consist of their spendable income, saving
and assets, debts, borrowing power, and attitude toward spending versus savings.

IV.

Personality
Refers to a persons consistent way of responding to a wide range of situations.
Personality traits such as adaptability, aggressiveness, dominance, defensiveness,
achievement, ascendancy, emotional, sociability, self-confidence, etc. may used to
define/describe a consumer personality.

V.

Self concept
The way we perceive ourselves is self-perception. It includes attitudes,
perceptions, beliefs, and self-evaluation. Self-concept combines ideal self image
(the way an individual would be) and the real self image (how an individual
actually perceives himself or herself) human behavior depends largely in selfconcept.

VI.

Lifestyle
Personalities and self-concepts are reflected in lifestyle. A Lifestyle is a mode
of living as identified by a persons activities, interest, like and dislikes, and
consumption patterns.

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Psychological Factors Influencing Consumer Behavior

I.

Motivation
We are all motivated by needs and wants. Need is a discrepancy between our
actual state and our desired state. Needs are the basic forces that motivate a person
to do something. Needs are more basic than wants. Wants are needs that are
learned during a persons life. Motives are the driving forces that cause a person
to take action to satisfy specific needs.

II.

Perception
Perception is the process by which we select, organize, and interpret stimuli
into a meaningful and coherent picture. In essence, perception is how we see the
world around us and how we recognize we have a consumption problem.
Products, advertisements, and stores are stimuli that consumers are exposed to.
Steps in perception
1. Selective exposure
2. Selective distortion
3. Selective retention

III.

Learning
Learning is a change in a persons thought processes caused by previous
experiences. It is also the process by which people acquire the knowledge and
experience that they apply to buying and using products. According to experts, most
consumer behavior is learned, not innate.
Steps in learning process
1. Drive- strong stimulus that encourages action.
2. Cues- are signal from the environment that determine the pattern.
3. Response- are behavioral reactions to the drive and cues.
4. Reinforcement- result when the response is rewarding or satisfying.

IV.

Values, Attitudes and Beliefs

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A Value is an enduring belief that a specific mode of conduct is personally or

socially preferable to another mode of conduct.
A belief is an organized pattern of knowledge that an individual holds as true
about his or her world.
An Attitude is a persons point of view toward a given object such as a brand.
Attitude represents a personal standards of good and bad, right and wrong, liking and
disliking. Attitudes have some action implications, beliefs are not so action-oriented.
5. Maslows Hierarchy of Needs

Physiological Needs
Needs for food, shelter, water, and clothing. They are essential to survival,
they must be satisfied first.
Safety Needs
Include security and freedom from pain and discomfort. Need for protection
and physical well-being
Social Needs
Include love and belonging. Love includes acceptance by ones peers as well
as romantic love.
Self-Esteem
Are self respect and sense of accomplishment, prestige, fame, and recognition
of ones accomplishments.
Self-Actualization
Is the highest human need which includes self-fulfillment and self-expression,
reaching the point in life which people are what they feel they should be.
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6. The Filipino as Consumer

Filipino buying and selling habits
I.
Suki
Means patronizing a particular store or seller only. This is equivalent to todays
marketing
II.

concept of store and brand loyalty.

Dagdag and hingi
A practice of asking for a little extra for free, in addition to what he/she has

bought.
III. Buena Mano
Is a belief that a successful sale made to the stores first customer will bring more
sales or better luck for the day, hence, the seller will give in to the request of the first
customer.
IV.
Tawad
Is to bargain, begging to get the seller to give in to a price the customer wants.
V.
Hulugan (Drop a payment)
Is the practice of collecting payment every payday until full payment is made for
VI.

goods bought on installment.

Tumpok-Tumpok
Is the practice of grouping item for sale instead of using scales or weighs. This is

usually practice in wet markets, street vending or roadside stalls.

VII. Kantahan
Kantahan is singing while selling.
VIII. Bulungan
Practice in fish sales, where buyer and seller negotiate price through whispering,
IX.

giving the transaction on individual intimate atmosphere.

Lako
Selling by walking around, a peddler walks through streets shouting his/her goods

for sale. Some furnitures are sold through lako.

X.
Tingi
Refers to selling in small quantities.
XI.
Pakyaw
To buy everything, equivalent to buying wholesale.

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Consumer Values
Personalism- it is the centrality of the subject over the object on who the person in
and not on what he knows and does. Examples of personalism:
1. Tawad system
2. Use of suki
3. Utang na loob
Small group centeredness- the small, primary group is the unit of thought and action
within a nation, not on the individual or on the whole country. Examples of group
centeredness are the barkada, kababayan, and officemates.
Reference:
Perner Lars. Consumer Behavior: The Psychology of marketing Retrieved from
http://www.consumerpsychologist.com/. Accessed on December 10,2014.
Marketing handouts (The Title and Author of the book was not included on the
handout thats why I cant cite it properly). Module 3- Understanding Consumer
Behavior as a Buying Process Pages 58-91.

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