CONSUMER BUYING BEHAVIOR
to describe the present buying
Behavior – reaction of consumers to
changes
Environmental Factors
1. Cultural Factors – perception,
attitudes, value and religion or
ethnic / racial groups
2. Social Factors - refers to the
relationship maintained or
established by customers with
other members of society.
3. Personal Factors – refers to the
personal characteristics of buyer in
terms of age, ...
4. Psychological Factors – refers to
the perception, belief & attitude of
consumers
Buying Decision Process
1. Recognition of their needs & wants.
2. Search for relevant information
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase analysis
Research – scientific investigation
- Collection, presentation,
analysis & interpretation of
gathered data.
Hypothesis – statement of assertion that
must be proven in subsequent research
work
Types of Entrepreneurial Research
Exploratory Research – preliminary
research work that primarily
designed to gather baseline
information.
Descriptive Research – objective is
behaviour
Casual Research/ Correlational
Study – objective is to determine if
buying behaviour of consumers is
affected by environmental factors
Research Data – kind of necessary
information to be gathered in answering
the objective of research work
Quantitative Data – can be counted and
mathematically computed
Qualitative Data – descriptive data hence
cannot be counted
Primary Data – research data sourced by
entrepreneur directly from the consumers
belonging in the market segment
Secondary Data – previously gathered by
another researcher and now exist
Research Instrument – tool used in
gathering or collecting data
Survey Questionnaire – used in gathering
the required data about buying behaviour
of consumer
Personal Interview – has face-to-face
interaction with consumers who are
respondents
Interview Schedule – instrument which list
the questions to be asked during personal
interview
Focus Group Discussion – conducted with
assistance of a moderator to gather to
gather views of selected consumers on
certain issues
Types of Buying Behaviour
 1. Complex Buying Behaviour - usually
manifested when buying expensive
goods
2. Simple Buying Behaviour – usually
exhibited when goods are not highly
price & consumer are not attracted to
certain brand
3. Brand Sensitive Behaviour – very
particular with product brand & less
concern with price
4. Price Sensitive Buying Behaviour –
usually concerned with the price of
the product instead of the brand.
MARKETING MIX
Marketing Mix - refers to a mode, mean,
or tool used to position its product to
market segment
- Also known as 7ps but originally
4ps; Product, Place, Price and
Promotion.
 Product - the tangible good or
intangible service offered by the
business
 Place - place where the target
consumers are.
 Price
» Cost of Making the Product
 Direct Labor - refers to the
wages paid to the workers who
are directly involves in
manufacturing the product.
 Direct Materials - pertain to
the materials that form part
of the finished product.
 Factory overhead - includes
indirect materials and labor
and other expenses
» Type of Product
 Industrial Products - used as
raw materials of the
manufacturing entities.
 Consumer Products- used and
consumed by individual
consumer.
» Stages of Product in Market
 Introductory Stage- new
product is highly priced when
introduced in the market, but
gradually reduced as
competitors’ increase
 Growth Stage
 Maturity Stage
 Decline Stage- the product
experiences a decreased or
negative growth in sales that
leads to lower profits.
» Psychological Pricing
 Promotional Pricing- product
is sold at lower price in
temporary period.
 Odd or even Pricing-
products sold at prices that
end in odd number 5 to appear
cheaper compared to product
with price that ends in even
number 0
 Prestige Pricing- products are
purposely sold at a higher
price order to create a high or
superior image.
» Discount Pricing - to keep up with
the competition in market,
recreate interest in the product,
and get rid of old stock
 Promotion - refers to the mode of
conveying the presence and
attributes of the product to the
target consumers
» Advertising - most common
medium of promoting a product
or services.
» Publicity - another way of
promoting the product or service
to the target consumers through
media coverage
» Personal Selling - involves a
salesperson who has personal and
direct contact with the
prospective consumers
» Sales Promotion - aims to
influence the target consumer to
buy the product now
 Discounts - allow the
consumer to buy the product
at a price lower that the
regular selling price.
 Coupons - form of incentive
to the customers for
patronizing a store.
 Cash Reward - means of
promoting the product helps
the business in gaining the
loyalty of customer
 Gift Certificates – incentive
to the customer who
complete the required
accumulated amount of
purchases
» Direct Marketing - undertaken
through the internet; starts by
building a consumer database,
performs a one-on-one approach
in building consumer relationship,
and sells the product online
 People - refers to individual
employees who are directly involved in
production, marketing, and sale of the
product
 Packaging - the process of putting
the product in package or container.
 Positioning - the place occupied by the
product in the minds of the consumers
Integrated Marketing Mix - this is the
mixture of different Ps to position the
product in market
NEEDS, WANTS & BRANDING
Needs – things that a must has in order to
survive
Wants – things that a person must have in
order to be happy, comfortable & satisfied
Abraham Maslow – postulated that human
needs are classified into five levels.
1. Physiological Needs – basic needs of
human
2. Safety Needs – physical, economic &
financial safety
3. Social Needs – need for friends,
acceptance, & love or belonging
4. Self-Esteem – need for respect,
recognition, & honor by local community
5. Self-Actualization – highest level of
needs; when people realized their
“ultimate dream”
Brand – refers to the name, design, color,
symbol
Brand Name – influences the buying
decision of the consumers
Branding Strategy – starts with the
formulation of a brand name for the first
single product
 Umbrella Brand Approach – all
products of the business carry the same
brand name.
 House Brand Approach – every
product of the same business has
separate brand name
Brand Equity – level or degree of the
consumers’ perception or reaction to a
brand
Branding Extension Strategy – when the
brand equity is capitalizing or levering on
such concept
 Line Extension Approach – the
existing approach has been modified or
altered
 Product Extension Approach – new
product carries the brand name in a
new category
BUSINESS PLAN – detailed & integrated
written document describes the various
activities
Feasibility Study – written document that
serves as the forerunners of the business
plan
Test of Possibility – new business idea
should have positive result
Test of Feasibility – viability can be
conducted
INTRODUCTION – presents the general
perspective of business
Proposed Name Business – must
reflect business identity & image
Address of the Business – important
to be written correctly because all
business correspondents will be mailed
there
Name of the Owner/s – must properly
state
o Incorporators – persons who
originally formed the
corporation
Description of the Business – must
include information about type of
product
Location of the Business
Funding Requirements and Source –
estimated total initial cost of business
venture
EXECUTIVE SUMMARY - points out the
overall highlights of the business plan as
well as a bird’s-eye view of its sections
1. Vision, Mission, Goals, &
Objectives -must clearly state
and easily understood
2. Business model - the perspective
of business in terms of structure,
production, operation, financial
activities that will lead to
achievement of VMGO
3. Business and product position -
help determine how business
define its course and process of
accumulating wealth
4. Wealth improvement approaches
- describe the
methodologies/approaches that
will be taken by the business
 5. Parties supporting the business -
description of the parties that
strongly support the business
a. Consumers
b. Creditors
c. Suppliers
d. Employees and staff
ENVIRONMENTAL ANALYSIS - a
strategic tool that helps determine the
external & internal factors affecting the
performance of business
 Global Analysis - May begin with
a description of global business
situation to provide knowledge
about global perspective or
horizon of the business.
 Societal Analysis - determine the
different variables affecting the
societal environment
Political Forces
Economic Forces
Socioeconomic forces
Technological Forces
Ecological forces, and
Legal Forces
 Industry Analysis - evaluation of
the forces in the industry that
affect the proposed business
BUSINESS DESCRIPTION - presents
the nature and form of the business to
be undertaken.
ORGANIZATION PLAN
1. Form of the Business
Organization - It can be in a form
of Sole Proprietorship,
Partnership, or Corporation.
2. Liability of the Owner or Owners
- describes the owner’s financial
obligations with creditors
o Limited Liability – if there still
remains unsettled financial
obligation, creditor can’t go to
property of business owner.
o Unlimited Liability – the
creditors can run after the
personal property of owner
3. Organizational Structure - usually
shown/reflected in organizational
chart; it shows and defines the
hierarchy of the different
positions in organization
4. Roles & Responsibilities - must
clearly define to avoid
misunderstanding and overlapping
of functions.
5. Salary Requirements - shows the
total estimated monthly and annual
salary requirements of the
business.
PRODUCTION PLAN - presents or
describes activities related to the
production of goods.
1. Production Schedule - presents
the total number of goods to be
produced and the expected time to
produces them
2. Production Process
3. Processing Plant & Equipment-
describes manufacturing plant
machinery & equipment, & the
various tools to be used
4. Sources of Material
5. Production Cost - shows the
estimated costs of production.
 - 3 Elements f Cost; Labor, 1. Major assumptions
Direct Materials, & Factory 2. Financial Statement Analysis -
Overhead conducted to determine the financial
OPERATION PLAN – it outlines the operation of the business in terms of
various activities from the acquisition of liquidity level, profitability of
raw materials to the delivery of products operations, & solvency status
to target consumers  Statement of Comprehensive
Income
1. Evaluation of Suppliers - must  Statement of Cash Flows
practice total quality management  Statement of Changes in Equity
to minimize  Statement of Financial Position
2. Material requisition & receiving
procedure
3. Storage and inventory control
system
» Just-In-Time Manufacturing
System – it eliminates wastage or
expire products and requires less
capital since only essential stocks
are ordered.
4. Shipment system and control
» In-transit – means that the
product is no longer in the
custody of the seller, but the
buyer has not yet received it.
5. Functions of support devices -
includes important role of other
support services
MARKETING PLAN - includes the details
on how the proposed business will sell its
product

1. Product
2. Place
3. Price
4. Promotion
5. People
6. Packaging
7. Positioning
FINANCIAL PLAN - accumulates &
describes all the data expressed in
monetary units