SHS

Principles of Marketing

Module 7
i
ABM • Principles of Marketing

Grade 11: Module 7

First Edition, 2021

Copyright © 2021

La Union Schools Division

Region I

All rights reserved. No part of this module may be reproduced in any form without

written permission from the copyright owners.

Development Team of the Module

Author: Jimena Veronica T. Nieva, MT

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of ABM

Michael Jason D. Morales, PDO II

Claire P. Toluyen, Librarian

 Target

BUSINESS MARKETS AND BUSINESS BUYING BEHAVIOR

As we engage ourselves in the study of the Principles of Marketing, it is
very

important for us to understand what business market is. and identify the different

factors that influence the business buying behavior. This module

discusses

“Business Markets & Business Buying Behavior”.

.
MELC’S 13 –WEEK 7
Differentiate the buying behavior and decision making of

individual/household customer versus the business (organizational)

customers. (ABM_PM11-Iei-13)

At the end of this topic to learners will be able to:

1. Differentiate business market from consumer market

2. Know the factors that affect buying behavior

3. Identify the different kinds of buying behavior

4. List and define the steps in the decision process

LET S START YOUR

JOURNEY IN LEARNING
PRE-TEST
THRU A PRE-TEST.
 ENJOY AND HAVE FUN!

Direction: Match column A to Column B. Write the letter only of the correct

answer on a separate sheet of paper.

1. The values, beliefs, behavior, A. Personal Factors

and material objects that forms

a people way of life

2. These are reference groups, families B. Psychological Factors

Roles, and status, norms

3. Motivation, perception, learning C. Cultural Factors

Belief and attitude

4. Age, life, cycle, stage, occupation and D. Social Factors

Economic circumstances

5. Groups that have a direct influence and E. Family

to which a person is called membership

groups.

6. It is the most important consumer buying F. Reference Group

organization in society
 Jumpstart

For you to understand the lesson well, let us have first an exercise.

Have fun and enjoy!

LET’S REFRESH YOUR MEMORY:

1. Define Market

2. Differentiate a customer from a consumer

3. What is the main objective of marketing?

Introduction:
The main activity of any business organization is to produce, sell and
serve

the business market as well as the consumer market. The main objective of

marketing is to satisfy needs and wants of people. “You cannot please

everybody”.

Customers and consumers have lots to choose from in the market. If you are
the sole

producer/ manufacturer or seller of a product, then everyone in the

market will

accept you. But as long as there are competitors in the market that pave way to
the

development and improvement of existing products, business organizations

have to
study the buying behavior or decision making of every customer and
consumer.

This study explores the dynamic of consumer and business buying behavior as
well

as the consumer and business markets-and those which they serve-have

to be

understood before marketing strategies can be developed.

Business Market- This is when organizations buy products or services either to

manufacture other goods or to resell them to businesses or consumers.

Consumer Market – this is when products or services are sold for personal

consumption.

Organizational Buying- Webster and Wind defined organizational buying as

the

decision-making process by which formal organizations establish the need for

purchased products and services and identify, evaluate and choose

among

alternative brands and supplies.

Business Buyer Behaviour refers to the buying behaviour of all the organizations

goods and services for use in the production of other products and services
that are

sold, rented, or supplied to others.

Business Buying Process- the decision process by which the business buyers

determine which products or services their organization need to purchase

ACTIVITY 1: Drill
Direction: Answer the following questions in a separate sheet of paper.
1. List down according to your priority at least three (3) products or services

that you want to have or buy.

2. What factors did you consider in choosing these products?

3. Who were involved in your decision making and how?

Discover

LET’S DIFFERENTIATE BUSINESS MARKET AND A CONSUMER MARKET

Characteristics Business Market Consumer Market

Demand Organizational Individual

Volume Larger Smaller

No. of Customers Fewer Many

Location Concentrated Dispersed

Distribution More Direct More Indirect

Nature of Buy More Professional More Personal

Buy Influence Multiple Single

Negotiations More complex Simpler

Reciprocity Yes No

Leasing Greater Lesser

Promotion Personal Selling Advertising

Factors That Affect Consumer Behavior:

1. Culture – This refers to the general or overall culture of a group. This

include

customs, arts, social institutions and achievements of a particular

nation,

people of another social group.

2. Social Factors – This is all about the norms of behavior, among smaller
groups

where a consumer belongs to. These are reference groups, family, roles and

status, norms

3. Personal Factors- These are the demographics of the individual that affect
the

manner by which products or services are viewed and treated. Examples:

Age,

life cycle, stage occupation and economic circumstances.

4. Psychological Factor- This is how individual behaves and it is the result of how

we are raised, who we interact with or what our histories are.

Examples:

Motivation, perception, learning, beliefs and attitudes.

The Buying Activity involves:

1. The Buying Center

2. The Buying Process

Three Major Types of Buying Situations

1. Straight Rebuy – This is a business buying situation wherein the

buyer

routinely re-order products or services without any modification

2. Modified Rebuy – This is a business buying situation wherein the buyer

wants

to modify product specifications, prices, terms or suppliers

3. New Task – A business buying situation in which a buyer purchases a

product

or a service for the first time.

The Buyer Decision Process

The buyer decision process examines how consumers make buying

decisions.

There are five stages within the process; need recognition, information search,
and

evaluation of alternatives, purchase decision, and post-purchase behaviour.

The Buyer Decision Process for New Products

1. Awareness - the consumer/buyer first learn about the new product, but

don’t have enough information.

 2. Interest – the consumer is motivated to find for information about the new

product/service that is offered in the market

3. Evaluation – (consideration stage) the consumer considers trying the new

product after gathering enough information about it.

4. Trial – the consumer tries the new product on a small scale to test if the

product is suitable for use.

5. Adoption – the consumer decides if the product has value or not.

People differ in their innovativeness if readiness to try new products.

Five different adoption categories can be identified as:

1. Innovators are risk taking customers who seek changes. They usually try
the

new product in the introduction phase of the product life cycle.

2. Early adopters are guided by respect. They are opinion leaders in their

communities and adopt new idea early about carefully.

3. The early majority are deliberate. Although rarely leaders, they adopt new

ideas before the average person.

4. The late majority are sceptical. They adopt an innovation only after a

majority of people have tried it.

5. Laggards are tradition bound. They are suspicious of changes and adopt
the

innovation only when it has become something of a tradition itself.

The new product characteristics will also influence the rate of

adoptions.
 Five characteristics that are especially important to consider are:

1. The innovation’s relative advantage or the degree to which it appears

superior to existing products

2. The innovation’s compatibly or degree to which it fits the values and

experiences of potential customers.

3. The innovation’s complexity or the degree to which it is difficult to

understand or use.

4. The innovations’ divisibility or the degree to which it may be tried on a

limited basis.

5. The innovation’s communicability or the degree to which the results can be

observed or described to others.

Characteristics that define Business Decisions and Decision Process

1. Buyers face more complex buying decisions

2. Buying process is more formalized

3. Buyers and sellers work closely together and build close long- term

relationship

Business Buyer Behaviour

At the most basic level, marketers want to know how business

buyers will

respond to various marketing stimuli.

Marketing stimuli centre around the four Ps-product, price, place, and
promotions.
 Other stimuli include major forces in the environment, economy,
technology,

politics, culture, and competition.

Participants in Business Buying Process

The major challenge of the buying centre concept for the marketer is to
find out:
1. Users - members of the buying organization who will use the

product or service.

2. Influencers – they are the people in an organization’s buying centre

who

affect the buying decision. They help define specifications and also
provide

information for evaluating alternatives

3. Buyers -members of the buying organization who make a purchase

4. Deciders- people in the organization’s buying centre who have formal or

informal power to select or approve the final suppliers.

5. gatekeepers – people who control the flow of information to others.

(Source: cram.com/flashcards/chapter-7business-markets-and-business-behavior-
2571893)

Four (4) Major Influences (Factors) on Business Buyers

 1. Environmental – may refer to the economy, supply conditions, technology,

politics, competition and culture

2. Organizational – may refer to as the objectives, strategies, structure,

systems

or procedures

3. Interpersonal – the influence, expertise, authority, dynamics

4. Personal -age, education, job position, motives, personality, preferences

and

the buying style

Business Buying Process

GENRAL NEED PRODUCT

Problem DESCRIPTION SPECIFICATION
Recognition

SUPPLIER SUPPLIER
ORDER ROUTINE
SELECTION SEARCH
SPECIFICATION
PROCESS

PERFORMANCE

REVIEW

1. Problem Recognition – someone in the company recognizes a problem or

need

that can be met by acquiring a good or service

2. General Need Description – the company describes the characteristics

and

quantity of the needed item

3. Product Specification - is the stage where the buying organization decides

on

and specifies the best technical product characteristics for a needed item

4. Supplier search is conducted to help the buyer find the best venders.

- Proposal solicitation, the buyer invites qualified suppliers to submit

proposals.

5. the supplier selection process is important because this is where the buyer

reviews proposals and selects a supplier or suppliers’ factors that influence

this process are:

a. quality products and services

b. on-time delivery

c. ethical corporate behaviour

d. honest communication

e. competitive prices

f. repair and servicing capabilities

g. technical aid and advice

h. geographic location

i. performance history
 j. reputation

6. Order routine specification. Here, the buyer writes the final order with

the chosen suppliers, list the technical specifications quantity needed,

expected time of delivery, return polices, warranties, and so on.

7. The final stage is performance review. The buyer rates his or her

satisfaction with supplier, deciding whether to continue, modify or

drop them

(Source: cram.com/flashcards/chapter-7business-markets-and-business-behavior-2571893)

CONSUMER BUYING PROCESS

PROBLEM RECOGNITION

INFORMATION SEARCH

EVALUATION OF

ALTERNATIVES

PURCHASE DECISION
PURCHASE

POST PURCHASE EVALUATION

E- PROCUREMENT
Business Buying on the Internet
1. e-Procurement is now common.

2. New connections with buyers are being formed with two way flow of

information.

3. Most purchases steer toward MRO (maintenance, repair, and

operations)

materials.

4. Some firms buy all of their general operating and industrial supplies online.
 5. Many benefits have accrued.

INSTITUTIONAL MARKET VS. GOVERNMENT MARKET

Institutional Market – involves hospitals, schools, nursing homes, prisons and

other

institutions that provide goods and services to people in their care. It is

characterized

by low budgets and captive patrons.

Government Markets – involve federal, state, and local units that purchase or
rent

goods and services for carrying out the main functions of the
government. They

typically require supplier bids, favour domestic suppliers and are carefully
watched

by outside publics.

Explore

Enrichment Activity 1: What’s in the box?

Direction: Fill out the boxes to identify the factor that affects the consumer
buying behavior.

Psychological Factors Social Factors

1.
1.

2.

2.
3.
3.

4. 4.

5.
5.

Enrichment Activity 2:

Direction: Read Carefully the following sentences and put a check mark ()

on the space corresponding your answers (Agree or Disagree.)

Agree Disagree
1. Consumers has many to choose from ______ ______

In the market.

2. Your environment plays a major role in ______ ______

Your buying decision.

3. The main objective of marketing is to ______ ______

earn profit.

4. Procurement of books is an example of ______ ______

Institutional market
5. Your family plays an important role when ______ ______
 when you want to buy something

6. Your age, gender and life style do NOT ______ ______

affect our buying decision

7. Post purchase evaluation is also similar

to product performance review ______ ______

8. On-line selling is one example of

e-procurement ______ ______

9. Problem recognition is involved both in

the consumer and business buying process ______ ______

10. The users of a product are also called

Consumers. ______ ______

Enrichment Activity 3:

Direction: The following numbers 54-58 are situations on Consumer Decision

Process for New Products. Based on the situation, choose the best answer
that describes each number using the following choices and write on the space

provided before the number: (Use a separate sheet for your answers)

A. Awareness B. Interest C. Evaluation D. Trial E. Adoption

____1. The consumer considers whether trying the new product

makes sense.

____2. The consumer becomes aware of the new product, but lacks

information about it.

____3. The consumer tries the new product on a small scale to

improve his or her estimate of its value.

____4. The consumer is stimulated to seek information about the new

product.

____5. The consumer decides to make full and regular use of the new

product.

Great job! You have understood the lesson.

Are you now ready to summarize?

Deepen

Direction: Answer the following questions based from real life situation. Use

a separate sheet for your answer.

We are all affected by the spread of corona virus since March, 2020
that

led to the decision of the Department of Education to move the

opening of

classes from June, 2020 to October 5, 2020. The Department of Education

 through the guidance of the IATF decided that the Learning Delivery Mode
is

Modular and Online method of instruction hence face to face modality

is

prohibited. This development led to the high demand of gadgets and

modern

technology. Stakeholders especially the parents wanted the best for

their

children. They seek for the best gadgets and suppliers in the market. Many

brands are offered in the market or through on-line marketing. In this

regard,

your parents asked you to decide what brand are you going to buy for use
in

your studies. You’re too excited to purchase a mobile phone or a laptop.

1. Describe the process that you went through in your purchase that
need thorough deliberation.
- I go for the device that is outstanding and also affordable.

2. Did you go around to look for the best price?

- Definitely!, because money in today’s situation are hard to earn, so I sought out
gadgets that are good for my wallet.
3. Did you choose quality over price or vice versa?
-I chose quality over price, because many devices are beneficial for the buyer that
has cheap price.
4. What is your deciding factor in choosing the product?
-My Deciding Factor is Quality, for that it is beneficial and “wallet-friendly” for
the buyer.
RUBRIC
Criteria Details Total Pts Your Pts
Message strategy How promising is the 25
message in terms of
convincing power
Market Choice Is the product economically 15
viable
Creativity How well is the 10
communication strategy put
 together
TOTAL POINTS 50 Pts

Great job! You have understood the lesson well! Are you

now ready to take the final assessment?

Gauge

DIRECTION: Choose the best answer and write the letter of your answer in
a separate sheet of paper.
1. Hospitals, schools, nursing homes are examples of?

A. Business Market B. Consumer Market

C. Government Market D. Institutional Market

2. How many activities are involved in the business buying process?

A. 3 B. 5 C. 7 D. 9
3.What is the last step in the consumer buying process?

A. Post Purchase Recognition B. Problem Evaluation

C. Purchase D. Purchase Decision

4. All of the following are factors that affect consumer behavior EXCEPT?

A. Cultural B. Personal C. Social D. Economical

5. What item appears first in the business and consumer buying process?

A. Information Search B. Product specification

C. Problem Recognition D. Purchase

6. Which of the following is NOT TRUE about the buyer decision process for

new products?

A. Innovators are NOT risk-taking customers who don’t seek changes.

B. Early adopters are guided by respect.

C. The early majority are deliberate. Although rarely leaders, they adopt new

ideas before the average person.

D. The late majority are sceptical. They adopt an innovation only after a

majority of people have tried it.

7. All of the following are participants in the buying process EXCEPT?

A. Deciders B. Influencers C. Peacekeepers D. User

8. Which of the folloowing is NOT an influencer on business buyers?

A. Environment B. Interpersonal

C. Organization D. Political

9. Which of the following is a characteristic of a Consumer Market?

A. Concentrated B. Individual
 C. Large D. Organization

10. Awareness, Interest, Trial, adoption are parts of what?

A. Buyer DecisionProcess B. Buying Behavior Process

C. Buying Participation Process D. Buyer Situation

11. It is the general term for a buying and selling process that is supported

by electronic means.

A. Computer Commerce B. Electronic Commerce

C. Internet Commerce D. Web Commerce

12. If your company were to make light bulbs to be used in photocopiers,

you would most likely be selling to a _______market.

A. Business B. Consumer C. Government D. Institution

13. When a business sets up a Facebook account to communicate with its

existing and potential customers, what technological tool is it using?

A. Affiliate Advertising B. Broadcast Media

C. Just-in -Time marketing D. Social Networking

14. This is the person who first suggest the idea of buying a particular

product or service.

A. Buyer B. Decider C. Influencer D. Users

15. Contains organizations that buy goods and services for use in the

production of other product and services that are sold, rented, or

supplied to others.

A. Business Market B. Consumer Market

C. Customer Market D. Industrial market

References
Department of Education - Curriculum Guide (2013). Fundamentals of Accountancy, Business and
Management II for Grade 12. K to 12 Senior High School ABM Specialized Subject. Second
Semester. Pp 1-6. December 01, 2013. Pasig City, Manila.

Ilano, A.B. Principles Of Marketing. Reprint, Philippines: Rex Book Store, 2017.

"Chapter 6. Consumer Buying Behavior Notes". Www1.Udel.Edu, 2020.

https://www1.udel.edu/alex/chapt6.html.

“Chapter 7. Business Market and Business Buyer Behavior”

cram.com/flashcards/chapter-7business-markets-and-business-behavior-2571893

“Chapter 6. Business Markets and Business Buyer Behavior”

studyblue.com/notes/note/n/chapter-6-business-markets-and-business-buyer-
behabior/deck/3935183
 Answer Key

15. A

14. C
groups 13. D

Reference 5.attitudes 12. A

norms 4.beliefs 11. B

Status 3.learnings 10. A

Roles 2.perception 9. B
families 1.motivation 8. D

7. C

Psychological Social 6. A
5. C

ActivityExplore: 1 4. D
3. A

consuming public 2. C
needs and wants of the D 1.

marketing is to satistfy the

3. The main objective of : AssessmentGuage

purchasers of the the product

they – are the Customers : Case ProblemDeepen

a product

the – end users of2. Consumers E5.

place. 4. B

where buying and selling take 3. C

the geographicalMarket-1. area 2. A
 Jumpstart 1. D
6. E
5. F Explore: Activity 3

4. A
3. B 10. Agree 5. Agree

2. D 9. Agree 4. Disagree
1. C 8. Agree 3. Disagree

Pre-Test 7. Agree 2. Agree

6.
Disagree 1. Agree

Explore :Activity 2