SHS 12 ABM

Module

PRINCIPLES OF MARKETING
2ND SEMESTER SCHOOL YEAR 2020-2021
(QUARTER 1: WEEK 2)
NAME:_______________________________________________________________________

ADDRESS:____________________________________________________________________

CONTACT:____________________________________________________________________

MS. ASNAIRAH M. DARAGANGAN, LPT.

____________________________ _______________
Teacher’s signature Student’s signature

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Contents

Title Page
Objectives/ Learning Competencies

CHAPTER 2
CONSUMER BEHAVIOR

The Purchase Decision Process........................................................................................... 13

Factors affecting Consumer Buying Behavior.................................................................... 17

LEARNING ACTIVITIES............................................................................................... 23

EVALUATION.................................................................................................................. 23

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OBJECTIVES:

At the end of the module, the learners are expected to:

A. Explain how the behavioral science can help in understanding the buying process
B. Identify the Factors affecting Consumer’s Buying Behavior

Chapter 2: Consumer Behavior

Marketing decisions tend to be better if the marketer is fully aware of the importance of
consumer behavior. Adapting the marketing concept really begins with identifying the needs of
the consumer, and this is better achieved through a study of consumer behavior.

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

The Purchase Decision Process

Consumer is buying decision process consist of the following stages: (1) problem
recognition; (2) consumer information processing; (3) evaluation of alternatives; (4) purchase;
and (5) post-purchase evaluation.

Problem Recognition

No one is immune from experiencing problems. Although some persons are not aware of
the existence of problems, some are wise enough to recognize them. The object of marketing is
to help people provide solutions to their problems which, in marketing terms, simply means
satisfying needs. But before a need is satisfied, it must first be identified.

An example is the advertisement trying to point out the need for parents to be in constant
accessibility with their children. The product offered to satisfy the need was the cell phone
especially designed for children. The user will have to simply push a single button to reach his
parents. The real need is the reduction or elimination of parents anxiety over the welfare of their
children.

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Figure 4
The Consumer's Buying Decision Process
Consumer Information Processing
After recognizing his need, the consumer who is properly motivated attempts to conduct
an information search. There are two ways of conducting information search: internal and
external. When the consumer scans his memory for experiences with product she thinks will
satisfy his need, it is referred to as internal search. This is especially applicable to low and
frequently used items like toothpaste and toothbrushes. The external search is an attempt to
generate information outside of the consumer's personal experiences. This is used for the
following reasons:

1. When the internal source of information is not enough;

2. When the risk of making the wrong decision is high; and

3. When the cost of gathering information is low.

The external sources of information consist of:

1. Friends And Family

2. Salesmen
3. Telemarketing
4. Trade Shows
5. Advertising
6. In-store display
7. Sales promotions
8. Packaging
9. Magazines and newspapers

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Evaluation of Alternatives
The objective of information search is to put up a list or alternatives that the consumer
thinks as worthy solutions to his problem. When the list is ready, the alternatives indicated will
be evaluated with the use of a set of criteria like price, functions quality, and the likes.

Table 2
Evaluation of Karaoke Machines

Brand Price Pitch Control Minus one Recording Sound Quality

Quality Capability Capability
A 10,000 75% 75% 80% 80%
B 12,000 N.A 95% 95% 95%
C 9,000 80% 85% 80% 80%
D 25,000 90% 95% 95% 95%

If for example, a consumer is evaluating four different brands of karaoke machines, the
specific criteria that could be useful are pitch control, minus one capability, ability to record,
sound quality, and price. Table 2 is an illustration of a sample evaluation of alternative karaoke
machines.

Purchase

After evaluating the alternatives, the consumer will have a tentative answer on "what to
buy" but he still have to find answers to the questions "where and when to buy". Because stores
offer different incentives to customers the purchase decision will tend to be more complicated.
For instance, one store may provide a free annual maintenance service, while another store
accepts trade-in of used appliances.

To further complicate decision-making, some products come cheap on certain seasons

like construction materials during rainy days. There are other factors that may hasten or delay a
purchase decision. An example is the sudden increase in the income of the consumer.

Post-purchase Evaluation

Whether or not the consumer will make a repeat purchase and endorse the product to
another will depend on how satisfied he is with the product. This is of utmost importance to
marketers and because this is so, his immediate concern is to determine the consumer's behavior
after a purchase is made.

The consumer's satisfaction level about the purchase of a product or service may be
classified into any of the following:

1. Highly satisfied;

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2. Somewhat satisfied; and

3. Dissatisfied
The consumer's satisfaction level is a result of comparing expectations about the product
against performance as perceived by the consumer (Figure 5).

A consumer who is highly satisfied with his purchase is more likely to make a repeat
purchase. He is also inclined to endorse the product to his relatives and friends.
If the consumer is not fully satisfied, he is more likely to consider other brands first
before making a repeat purchase of the product he first bought. Also, he will not be too
enthusiastic about endorsing the product.

If the consumer is dissatisfied, he will not only tend to avoid buying the same brand
product again and it will also be hard to convince him to patronize the company’s other brands.

If the marketer wants continuous patronage of customers in the three levels, he will spend
the greatest amount of effort in convincing the dissatisfied customer.

When the marketer knows what will satisfy his customers, he will know the exact
marketing mix he will use.

COMPARISON DIFFERENCE RESULT

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Factors Affecting Consumer Buying Behavior

The consumer's buying behavior is affected by three factors: (1) psychological variables;
(2) social influences; and (3) the purchase situation (Figure 6).

The Consumer and Psychological Influences

The buying behavior of the consumer is affected by psychological variable consisting of

motivation, perception, learning, attitudes, and lifestyle.

Motivation. Everyone, including the consumer, makes a purchase decision because he is

motivated to do so. The motivation to buy, however, happens as a result of the "drive stimulus"
which in turn, is the result of an unsatisfied need (Figure 7).

As defined earlier, need is a thing or service that is required by a human being for his
health and well-being. The need that moves a person to action is called "drive".

Perception. People see, hear, taste, and feel differently. What may be beautiful to one may not
be so to another person. A sound that may be too loud to one may be just fine to another. As such
products, advertisements, packaging, and others are perceived differently by different people. An
advertisement may not be appreciated by everybody when confronted by it, but there will be
some who will be motivated to buy what is advertised.

Why do people act differently from one another? It is because one person's need and
attitude are different from another person's. Because of this difference, perceptions about any
stimulus differ from person to person. Actually, the person is really affected by the selective
process of perception consisting of the following:

1. Selective exposure. This happens when a person pays attention only to messages that are
not against his attitudes and beliefs. For example, a person who believes in natural
healing will be more attentive to the advertisement of a herbal food supplement.

2. Selective attention. This occurs when the person who has selected the information he
wants to be exposed to avoids contradictory information. For example, a person who
believes credit cards are really necessary will not pay attention to negative comments
about interest payments, service fees, and the need to be conscious about creating a
savings fund.

3. Selective comprehension. This means the person interprets selected information to

conform with his attitudes and beliefs. Information may mean one thing to a person while
another person will interpret the same information differently. The person who chooses
the interpretation that does not contradict his attitudes and beliefs is doing selective
comprehension.

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Figure 6
Factors Affecting Consumer’s Buying Behavior

Figure 7
The process of Motivation

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4. Selective retention. This occurs when a person receives many kinds of information but
tend to remember only those that conforms with his attitudes and beliefs. When a fund
investment solicitor is introduced to a heterogeneous group, for instance, he will tend to
remember only the name of the wealthiest person.

Learning. A change in behavior occurring as a result of past experience is called learning.

For example, a consumer buys a certain brand of chocolate and it did not satisfy him, he learns
from that experience. When he intends to buy chocolate again, he switches to another brand.

On the other hand, if the consumer is satisfied, he tends to make a repeat purchase. When a
series of repeat purchases satisfied him, the probability of buying the same product again is
increased.

He continues to behave that way until a stronger motivator comes along and he switches to
another brand.

Attitudes. The buying behavior of the consumer is also affected by his attitude. For instance,
if the consumer really thinks smoking is dangerous to his health, it will be very difficult to
convince him to buy cigarettes.

Figure 8

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Stages in the Selective Process of Information

An attitude may be defined as a person's feeling about something like a product, an

advertisement, a salesman, a company, or an idea. Attitudes do not form easily. It takes many
years to develop them through a learning process which are affected by:(1) family influences; (2)
peer group influences; (3) information; (4)experience; and (5) personality.

Much of the child's attitudes are influenced by parents. At age seven, much of the parents
biases, prejudices, likes, and dislikes are absorbed by their children. The time spent by the
consumer with his peers exposes him to influences affecting buying behavior. For example, if the
consumer's co-employees start investing in residential buildings, the consumer is persuaded to do
the same.

Attitudes are also influenced by past experiences and information not previously
available. For instance, an alumnus is satisfied with the quality of education he received from his
almamater, so he allowed his eldest child to enroll in the same school. When that parent received
information about the new school in the vicinity with better facilities and faculty, he let his
second child enroll in that school.

The consumer's personality also affects his attitudes. The aggressive person, for instance,
would be more apt to buy sports motorbike and pistol for target practice.

Lifestyle. The consumer's purchasing decision is also influenced by his lifestyle. The
individual's mode of living is called lifestyle and may be identified by his activities, interests,
and opinions.

Lifestyle reflects on how people see themselves and how they believe others see them. A
person, for instance, may see himself as somebody worth to be called "a Filipino don" or
"ahaciendero". His buying behavior will be characterized by purchases of large tracts of land,
high-priced cars, and buildings designed for the rich.

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Another example is the person who sees himself as a loving husband and a responsible
parent. His inclination is to buy assets that would enhance the family's welfare. When he
considers buying a car, he will get one that will suit the family's needs. He is also partial towards
the education of his children and it will be easy to persuade him to buy education insurance.

Social Influences

The consumer's buying behavior is also influenced by his relationships with other people,
formal or informal. Social influences on purchasing decisions could come from (1) personal
influence; (2) reference groups; (3) the family; (4) social class; or (5) culture Personal Influence.
The views, opinions, and behavior of other persons oftentimes influence the purchasing decision
of the consumer

Personal influences that are important to marketers comes from the following sources:

1. opinion leaders

2. word-of-mouth

Opinion leaders are persons believed to be experts in their respective interests. Examples
are high profile sports stars like Manny Pacquiao and Efren "Bata Reyes. When these persons
make product endorsements, it is expected that their followers will be influenced.

When friends and relatives communicate orally, they influence one another. Because they
trust each other, this word-of-mouth communication is seen as a very powerful means of
influencing people.

Reference Groups. These are groups of people that are looked upon by a concerned
member when forming an attitude about a particular topic. For example, the newest member of a
school's teaching force began to think of buying a motorbike he can use in going to work, he
sought the opinion of his co-teachers. In this case his co-teachers are his reference group.

The Family. Consumer buying behavior is influenced by three sources related to the
family as a concern: (1) consumer socialization (2) family life cycle; and (3) family decision-
making Consumer socialization refers to the process by which consumers learn the nuances of
purchasing. Consumers learn how to buy in two ways: (1) through interaction with other people;
and (2) through their own personal experiences.

The family progresses in form from formation to child- rearing, middle age, and finally
retirement. As the family passes from one stage to another, changes in income and family
situation also happens. This results to changes in the family's purchasing behavior.

Who makes the purchasing decision is also an important factor in the decision-making
process of the marketer. The situation could either be a spouse making the decision or both
spouses making a joint decision. It is also important to provide answers to the following: who

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gathers information relating to the purchase; who influences the decision-maker; who does the
purchasing; and who uses the product.

Social Class. The consumer's social class is a big influence on his buying behavior.
Social class refers to a group of people who have approximately equal position as viewed by
others in the society.

Social classes may be roughly subdivided into upper, middle, and lower classes. These
general classification may be further subdivided and the general characteristics of each sub-class
determined. With such description, it will be easier to determine the inclinations of each sub-
class including purchasing behavior.

One class will have needs different from those of another class. The lower class, for
instance, will be predisposed to spending their limited income on basic needs like food and
clothing. The middle class will have some discretionary income which can be spent for education
and entertainment. It will be very difficult for marketers to convince the lower class people to
reduce spending on food and clothing so they can buy luxury items.

Culture. The set of values, beliefs, attitudes, and behavior patterns shared by the
members of a society and transmitted to the next generation through socialization is called
culture. A well-known attitude common to Filipinos is "close family ties Advertising that
highlights this cultural norm is expected to Defective. The advertisement emphasizing
communication between family members using the cell phone is a cultural influence.

The Purchase Situation

The purchase decision process is also affected by the purchase situation. The situational
influences consist of (1) the purchase task; (2) the social surroundings; (3) the physical
surroundings; (4) temporal effects; and (5) antecedent states.

The purchase task is derived from the reason why the consumer is making a purchase
and this affects buying behavior. A consumer, for instance, will exhibit a certain behavior when
buying a product like a bath soap for himself. His behavior will be different, however, when he is
purchasing a bath soap for a lady he is courting.

The social surroundings refer to the situation of people present in the purchase area. A
person who is on a late night shopping may change his mind if he finds the place teeming with
suspicious characters.

The physical surroundings may also affect the purchase decision of the consumer. A
dirty and noisy shopping place, for instance, may discourage a consumer to shop.

The time of the day the purchase is made and the time available for shopping are
temporal effects that may affect purchasing behavior. The person who is in a hurry may settle for

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any brand of the product he wants. In the afternoon during hot summer days, the consumer is not
likely to order hot coffee in a restaurant.

Antecedent states like the consumer's mood or the amount of money he has in his pocket
can affect his buying behavior. A person who has just broken up with his girlfriend will behave
differently. Even if he is inside a shopping place, he may find it hard to concentrate.

LEARNING ACTIVITIES

Discussion Questions

1. Why is knowledge of consumer behavior important to the marketer?

2. What stages does the buying decision process of the Consumer consist of?

3. What happens when the consumer performs an internal search for information?

4. How is the consumer's satisfaction level derived?

5. What is meant by "selective exposure"?

6. How are attitudes formed?

7. Why are opinion leaders expected to influence Consumers?

8. What are the ways by which consumers learn to buy?

9. Why is social class an important factor in consumer buying behavior?

10. What are "reference groups"?

EVALUATION

Individual Activity

Prepare a list of five products purchased by your family Indicate who is the information
gatherer, the influencer, the decision maker, the purchaser, and the user.

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