MARKET RESEARCH AND CONSUMER BEHAVIOR LEARNING MODULE

Program: Bachelor of Science in Topic: Introduction & Overview to the

Entrepreneurship Study of Consumer Behavior

Course: Market Research and Instructor: Robielyn M. MAgsino, MBA

Consumer Behavior
Code ENCO04 Module 1 Week #: 1 and 2 # of 10
#: Pages:

I. Preliminaries
Introduction to This module follows the Introduction which is the discussion of the Syllabus
the Module and Grading System. The module discusses Introduction & Overview to the
Objective Study of Consumer Behavior. To introduce the concept of consumer behavior,
the students must first understand about the discipline of consumer behavior in
relation to marketing.
Assessment/
Section Topics Learning Outcomes Evaluation Modality
Section 1. Marketing 1. Discussion of the School Quiz Modular
Concept Policies and grading system Blended
2. Understand the development Learning Teaching –
Section 2: 4 Ps of of the marketing concept. Journal Online via
Marketing 3. Define customer value, LMS
satisfaction, and retention. A rubric for the
Section 3: Factors 4. Exploring the link between report and Modular
affecting consumer marketing and Customer research Blended
Behavior orientation assignment Teaching –
5. Definition, role and importance about the Offline
Section 4 :Social Factors of consumer behavior for a factors affecting Via Printed
marketer consumer Modules
Section 5: Perception 6. Identify the major factors that behavior
influence a consumer’s
purchase decision and
behavior
7. A simplified model of the
consumer decision-making
framework
8. Define consumer behavior.

II. Instructions

KEYWORDS AND CONCEPTS

Market research is the process of determining the viability of a new service or product through
research conducted directly with potential customers.

Marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or
product in the market.
TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES
 Price refers to the value that is put for a product. It depends on costs of production, segment
targeted, ability of the market to pay, supply - demand and a host of other direct and indirect factors.

Product refers to the item actually being sold. The product must deliver a minimum level of
performance; otherwise even the best work on the other elements of the marketing mix won't do any
good.

Place refers to the point of sale. In every industry, catching the eye of the consumer and making it
easy for her to buy it is the main aim of a good distribution or 'place' strategy. Retailers pay a premium
for the right location.
Promotion refers to all the activities undertaken to make the product or service known to the user
and trade. This can include advertising, word of mouth, press reports, incentives, commissions and
awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes.

SECTION I. MARKETING CONCEPT

Marketing and Customer Orientation

To introduce you to the concept of consumer behavior, let us first understand about the
discipline of consumer behavior in relation to marketing.

What is Marketing?

Process that aims at satisfying individual and organizational needs by creating, offering and
exchanging competitively made products that provide value to the buyers.

It is a process that, through market research, identifies the consumers’ needs,

desires, and demands, and that, through pricing, distributing, and promoting products or
services, satisfies customers and achieves the objectives of the organization

Today our focus is on customer. Objectives like revenue, profit, market share, etc. are important,
but they will flow only by acquiring customer competence. Today’s choice empowered customer,
supported by a competitive environment, global quality, and new economic realities, decides the fate
of the marketer. So let’s define Marketing once more: “It is a total business philosophy aimed at
identifying the needs of each customer group, then designing and producing product / service
package so as to serve the groups more effectively than the competitors”.

Consumer Focused Marketing

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 According to Stanton: “Marketing Mix is the term used to describe the combination of the
four inputs that constitute the core of a company’s marketing system: the product, the price structure
the promotional activities, and the placement system”. The marketer has to track the consumer
behavior constantly and adjudge an optimal combination of these marketing mix factors so that best
sales are generated.

Section 2: 4 Ps of Marketing
 Product
 Price
 Promotion
 Place

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 Product

We as customers view a product as a ‘bundle of satisfaction’ and not merely the physical
object. We gives importance to both the tangible and intangible attributes of a product. Intangibles
provide psychological and social benefits for the buyer.

Pricing
Price has to be fixed in such a manner as on one hand it is lower or equal to the value
delivered by the product, and on the other hand it should cover at least all manufacturing and post
manufacturing (transportation, warehousing, promotional) costs plus the targeted level of profit
margin. Actual price fixing of course depends on the functional features of the product and the image
of the brand. Then there is the degree of competition that dictates the price of a brand vis-à-vis its
competing brands-. That is why you would find Pepsi and Coke priced at same level. Price can also
act as a communication tool. For example price package may give the message of affordability,
exclusiveness, etc. Cartier watches, for example.

Placement
Physical distribution is the third dimension of marketing activity. Place convenience is
needed to make purchase. A marketer has to decide about two things: Keeping in mind customer’s
requirements, first, what will be the channel of distribution; and, second, how will the goods be
actually distributed. Physical distribution activities are related to the movement of products from the
production site to purchase point. While the buyer must get it in right shape and at right time, the
sender should be able to ensure availability at minimum cost to him. The marketer can either sell
directly to the customers or through middlemen. A typical distribution chain could include movement
of product from manufacturer to wholesaler to retailer to customer.

Promotion
Promotion is also called marketing communication. It aims at informing and persuading
the customer to buy whatever the marketer is offering. Since a customer can be reached through a
number of channels, companies undertake integrated communication, which is a combination of
personal selling, advertising, public relations, and sales promotion.

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 Section 3: Factors affecting Consumer Behavior

Let us now look at the scope of Consumer Behavior. The scope covers:
• What they buy
• Why they buy
• When they buy
• Where they buy it
• How often they buy it
• How do they buy it

Factors Influencing Buyer Behavior

Whenever we buy anything our final decision, as a consumer will definitely be affected
by certain factors. Some of these major factors are as given below:
1. Cultural
2. Social
3. Personal
4. Psychological

The first stage of understanding buyer behavior is to focus on the factors that determine he “buyer
characteristics” in the “black box”. These can be summarized as follows:

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 Cultural Factors

Culture is the most fundamental determinant of a person’s want and behavior. The growing
child acquires a set of values; perceptions, preferences and behavior through a process of
socialization involving the family and other key institutions. Cultural factors have a significant impact
on customer behavior. Marketing are always trying to spot “cultural shifts” which might point to new
products that might be wanted by customers or to increased demand.
Each culture contains “sub-cultures” – groups of people, which share values. Sub-cultures can
include nationalities, religions, racial groups, or groups of people sharing the same geographical
location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own.
For example, the “youth culture” or “club culture” has quite distinct values and buying characteristics
from the much older “grey generation” Similarly, differences in social class can create customer
groups. In fact, the social classes are widely used to profile and predict different customer behavior.
Social class is not just determined by income. It is measured as a combination of occupation,
income, education, wealth and other variables. Social Classes are relatively homogeneous and
enduring divisions in a society which are hierarchically ordered and whose members have similar
values, interests and behavior.

Social Class Characteristics

Upper- Upper Upper-Uppers are the social elite who live on inherited wealth and have
well-known families. They maintain more than one home and send their
children to the best schools. They are in the market for jewelry, antiques,
homes, and foreign vacations. While small as group they serve as a
reference group to others to the extent that other social classes imitate
their consumption decisions.
Lower-Uppers Lower Uppers are persons who have earned high income or wealth
through exceptional ability in their profession or business. They usually
come from the middle-class. They tend to be active in social and civic
affairs and seek to buy the symbols of social status for themselves and
their children, such as expensive cars, homes and schooling. Their
ambition is to be accepted in the upper upper status, a status that is more
likely to be achieved by their children than themselves.
Upper -Middles Upper Middles possess neither family status nor unusual wealth. The
primarily concerned with “career”. They have attained positions as
professionals, independent businesspersons, and corporate managers.
They believe in education and want their children to develop professional
or administrative skills so that they will not drop into the lower stratum.
They are civic minded and are a quality market for good clothes, homes,
furniture and appliances.
Middle Class The middle class is average paid white and blue-collar workers who try to
do the proper things. Often they will buy products to “keep up with the
trends”. The middle class believes in spending more money on “worth-
while experiences” for their children and aiming them towards professional
colleges.
Working Class Working class consists of “average pay blue collar workers and those who
lead a “working class life-style”, whatever income, school or job they have.
The working class depends heavily on relatives for economic and
emotional support, for tips on job opportunities, advice on purchase, and
for assistance in times of trouble. The working class maintains a sharp
sex-role division and stereotyping. They are found to have larger families
than the higher classes.
Upper Lowers Upper Lowers are working, though their living standard is just above the
poverty line. They perform unskilled work and are poorly paid. Often they

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 are educationally deficient. Although they fall near the poverty line, they
manage to maintain some level of cleanliness
Lower Lowers Lower Lowers are visibly poverty-stricken and usually out of work. Some
are not interested in finding permanent jobs and most are dependent in
charity for income. Their homes and possessions are “dirty, ragged, and
broken-down”

Section 4 :Social Factors

A customer’s buying behavior is also influenced by social factors, such as the groups to
which the customer belongs and social status. In a group, several individuals may interact to
influence the purchase decision. The typical roles in such a group decision can be summarized as
follows:

Initiator
The person who first suggests or thinks of the idea of buying a particular product or service
Influencer
A person whose view or advice influences the buying decision
Decider
The individual with the power and/or financial authority to make the ultimate choice
regarding which product to buy
Buyer
The person who concludes the transaction
User
The one who actually uses the product or service.

The family unit is usually considered to be the most important “buying” organization in
society. It has been researched extensively. Marketers are particularly interested in the roles and
relative influence of the husband, wife and children on the purchase of a large variety of products
and services

Personal factors
are those factors, which are unique to a particular person including demographic factors,
Sex, Race, and Age etc. Personal factors also include who in the family is responsible for the
decision-making.

Psychological Factors
Psychological factors include:
• Motives—A motive is an internal energizing force that orients a person’s activities toward satisfying
a need or achieving a goal. Actions are effected by a set of motives, not just one. If marketers can
identify motives then they can better develop a marketing mix. MASLOW hierarchy of needs is the
theory, which explains concept of motivation through unfulfilled needs which could be any of the
following:
• Physiological
• Safety
• Love and Belonging
• Esteem
• Self Actualization

Section 5: Perception

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to
produce meaning. This means we chose what info we pay attention to, organize it and interpret it. Information
inputs are the sensations received through sight, taste, hearing, smell and touch.
Selective Exposure- This means we tend to select inputs to be exposed to our awareness. This is more
likely if it is linked to an event, and/or satisfies current needs.
Selective Distortion- This happens when we change or twist current received information, which is
inconsistent with our beliefs.
Selective Retention- In this case we remember only those inputs that support our beliefs, and forget those
that don’t. For instance, an average supermarket shopper is exposed to 17,000 products in a shopping visit
lasting 30 minutes-60% of purchases are unplanned and is also exposed to 1,500 advertisement per day.
Hence they cannot be expected to be aware of all these inputs, and certainly will not retain many Ability and
Knowledge Learning can be said to be changes in a person’s behavior caused by information and experience.
Therefore to change consumers’ behavior about your product, you need to give them new information
regarding the product like free sample etc. When making buying decisions, buyers must process information.
Knowledge is the familiarity with the product and expertise. Inexperience buyers often use prices as an
indicator of quality more than those who have knowledge of a product. Non-alcoholic Beer example:
consumers chose the most expensive six-pack, because they assume that the greater price indicates greater
quality.
Learning is the process through which a relatively permanent change in behavior results from the
consequences of past behavior. • Attitudes we can say that attitudes are knowledge and positive and negative
feelings about an object or activity. It maybe tangible or intangible, and living or non- living. Generally it seen
that attitudes drive perceptions We learn attitudes through experience and interaction with other people.
Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm’s
marketing strategy.

III. Viable and vibrant Activities

Description of the Learning Activities

Activity 1: Quiz
After the face to face discussion a quiz will be conducted to assess the learning of the students to
the topic.

Activity 2: 4Ps of Marketing

The student will analyze the 4Ps of Marketing of an existing company. They will evaluate the marketing mix
of the company based on what they have learn in the discussion.

IV. Opportunity to reflect and articulate students’ acquired knowledge.

Purpose of Activity
1. to assess the understanding of the students on the 4Ps of Marketing – product, price, place, and promotion;
2. to determine the basic cognitive skill of students in analyzing the different company;

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES

 Summary and Reflection
A learning journal about this activity will be accomplished by the students.

V. Textbooks and other References

1. Entrepreneurial Marketing: A Practical Managerial Approach by Robert D. Hisrich and Veland Ramadani

TANAUAN CITY COLLEGE ELEC2 – MODULE 1 ENTREPRENEURIAL MARKETING STRATEGIES