MODULE 3 CONSUMER BUYING BEHAVIOR

Consumers make countless buying decisions in terms of what product or brand

they will avail or the type of services that they wish to have everyday. Consumers
buying decisions, however are affected by a number of factors. It is for this reason that
companies conduct a lot of research to find out what product or services the market
demands or looks for, where consumers usually purchase products that will satisfy their
needs and wants, and what type of promotions influence them to buy and at what price.
This topic on consumer buying behavior looks into the various factors that
influence purchasing decisions, whether the company caters to consumer market or
industrial market.
Objectives:
At the end of this module students are expected to:
1. Compare the different factors affecting buying decisions
2. Analyze what influences the market purchasing decisions
3. Identify the industrial market and its characteristics
4. Discuss the types of buying situation and the participants in the buying center.

INTRODUCTION
Consumer buying behavior is comprised of all considerations a person takes
when deciding what product to choose or buy, where to buy the product, when to buy
the product, how the product will be purchased, and why the particular product or
brand was chosen. This also includes other factors like buyer’s characteristics that
influence a person’s decision to buy a certain product or avail of particular services.
PATTERN OF CONSUMER BUYING BEHAVIOR
In order for a buyer to decide on the kind of product he wants to purchase, there
are stimuli that triggers his decisions. These stimuli consist of the different controllable
environmental factors like the marketing mix – product, price, place and promotions
and the uncontrollable factors like demographic, economic, technological, political,
socio-cultural and climate.
According to Kotler and Armstrong (2009), marketers must figure out what is int
eh buyer’s black box, which has started after considering the stimuli. The buyer’s black
box, where the stimuli entered, involves the responses of customers for the different
stimuli which will form the basis of the customers’ purchase decisions. It also consists of
the buyer’s characteristics which describe how the buyer reacts to certain environment
stimuli.

FACTORS AFFECTING CONSUMER BUYING BEHAVIOR

1. Cultural Factors
a. Culture
b. Sub-culture
c. Social class
2. Social Factors
a. Reference group
b. Family
c. Roles and status
3. Personal Factors
a. Age and life cycle
b. Occupation
c. Economic situation
d. Lifestyle
e. Personality and self-concept
4. Psychological Factors
a. Motivation
b. Perception
c. Learning

CULTURAL FACTOR
Cultural factor has the broadest impact on consumer buying behavior, This
represents the basic values of an individual including his beliefs and behavior, which are
learned from family, schools, and other institutions in society.
Because of cultural differences, companies must be able to fully understand their
market and be able to come up with a marketing program fitted to the preferences of
their target audience. Within a particular culture are various sub-culture or groups of
individuals with common practices, beliefs, dialect or orientation and belong to similar
geographical location. A specific example is the regional groups in the Philippines. In
the Philippines, there are Bicolanos, Kamampangans, Ilocanos, Cebuanos and many
others. Each of these groups has its own common practices, traits and behaviors that
are unique to its respective group.
Society is also made up of class structure knows as social class. This is composed
of individuals with the same interests, behaviors as well as values. Individuals in the
same social class tend to dress in the same manner, speak the same language, and
engage in particular activities. Society’s social class is determined by income, level of
education and wealth.
Four categories of Social Class Structure in the Philippines (Llanes and Jurado
1982):
1. Class A. This is equivalent to the upper-upper stratum in the United States.
These are the elite or people who are wealthy or those from well-known families.
They own several businesses, houses and cars and can travel anywhere at any
given time. Mostly, their houses are filled with amenities.
2. Class B. People from this class are professionals and entrepreneurs . They may
also have comfortable lifestyle and good income. They live in well-furnished
town house, condominium units or well-furnished houses in known subdivisions
or villages, possessing modern household conveniences.
3. Class C. This is the middle class, which is composed of workers who live in modest
residences, and if located in the city are often rented. In most situations, people
who belong to Class C do not have the convenience found in the homes of those
in the Class B. The middle class is composed of workers who often live in rented
apartments and earn average wage.
4. Class D. A big majority of people belong to Class D. This refers to the upper
lower class made up of skilled and unskilled laborers, low-waged earners. These
are those considered doing menial job for minimal pay. A big majority of our
people belongs to Class D. Sometimes, these individuals are lucky to be given
regular jobs or regular source of income. Most of these workers are paid on daily
basis and that means- No work, No Pay. It is hard for this group to improve their
standard of living with limited opportunity to get employed and the cost of
education is high. It is with this condition that most companies or institutions
focus their corporate social responsibility (CSR) programs toward helping this
group improve their standard of living.

SOCIAL FACTOR
 Consumer buying behavior is also influenced by social factors such as family,
reference groups, social roles and social status.
Reference groups refer to groups that can strongly influence the attitude and
character of a person. The group which a person wisher to be part of, is referred to as
the aspirational group. Example of this is when a teenager wishes to be a member of a
professional photography club in the future. A membership group is where a person is a
member. This group has direct influence on the person’s decisions especially when it
comes to his/her brand choice.
Family members are strong buying market, family is the most important
consumer buying organization in society. Parents always influence the brand choice of
customers, especially the young ones. Companies are expected to know the various
purchasing roles of each member of the family. For instance, finding out who among
the family members has a strong decision power when it comes to availing education-
related products or services, or who decides on what household appliances to buy.
Normally, in the area of food consumption, the wife is given the authority to decide.
Children are also good members of the family to consider as target market. Most travel
destinations or vacation is availed by the family because of the suggestions.
The different activities expected from a person are known as roles. An individual
role carries a particular status given by society. Status is the esteem provided by society
in relation to the role of an individual. A person purchases products that reflect his/her
role and status. Consider the various roles played by a father who work as a
department manager. In his office, he is someone who leads his team; at home, he
plays the role f a loving father and dedicated husband; toward his parents, he plays the
role of a son; and toward his favorite basketball team, he plays the role of an avid fan.
As a department manager, he tends to purchase clothes, which reflect his role and
status. His choice of a brand for a pen or bag also reflects his role and status. As a
father he must be careful in his choice of television programs, especially if he watches
together with his young children.

PERSONAL FACTOR
People depending on their age and position in the life cycle stage, desire different
products.
 Family life cycle includes being adolescent, single, married, couple without child
or couple with a child or children, and senior citizens or those in their 60 years and
above.
The elderly prefer mellow music and serene places where they can truly relax.
Retirees and upscale individuals are the target market for vacation packages especially
luxury cruises. Newlyweds are the best market for appliances and condominiums or
housing investment. On the other hand, teenagers prefer upbeat music. One’s job or
occupation also influences the type of clothing a person will wear, the place for stay for
vacation and the food to eat in a restaurant or dining place. For example, people who
work at the office tend to buy mostly corporate attired while those with blue collar job
tend to purchase mostly jeans, t-shirts or working clothes.
The income level has an influence on the choice of the products or services of
the market. The better the economic situation of a person, the more brand conscious
he becomes and therefore, he will tend to spend more. Lifestyle of a person changes as
income improves. For instance, a lot of people now are becoming more health
conscious that yogurt houses and various tea kiosks in different places, especially in
malls, are sprouting. They are also becoming more conscious about their grooming and
physique that they frequent facial clinics, spa and gym to make sure that their physical
health is maintained. Because of this, part of their income s saved for the purpose.
Personality is the totality of person’s being consisting of many traits such as being
aggressive outspoken, dominant, and having self confidence among others.

PSYCHOLOGICAL FACTOR
Psychological factors cover those different areas that influence the market such
as their motivation level, beliefs and way of looking at things or situations.
Motivation refers to what stimulates a person to purchase a product or avail a
service. A person’s level of motivation can be associated with the different levels of
needs as identified by Abraham Maslow in his hierarchy of needs.
Another psychological factor that affects buyer’s decision is their perception
about a product, service or situation. Perception is a person’s interpretation of the
information around him that helps him form a meaningful scenario. People learn from
their actions. Learning involves changes in the person’s attitude according to his
experience. If a person’s experience in using a particular brand of laptop or mobile
phone is satisfying, he will probably choose to use or buy or more products from that
brand and will even be promoting the brand unconsciously through word of mouth.

BUYERS DECISION PROCESS

The way consumers purchase a specific product is strongly influenced by cultural,
social, personal and psychological factors. These factors are not controlled by any
marketer; however companies must consider all of these influences in drafting any
marketing program so it can better serve its target market.
1. Need Recognition
The initial step of a person on deciding to purchase a product to recognize
that he has a need that has to be met. A person’s desire for a product may be
influenced by stimuli within himself, like feeling of hunger or exhaustion that will
be satisfied by food or rest. Need can also be influenced by external stimuli like
seeing the classmate with the latest cellphone model or reading a print ad
showing amazing features of a laptop. These stimuli can make a person consider
purchasing a product.
2. Information Search
After recognizing the need or problem and identifying the product that will
satisfy the need, the next step in buying decision process is the search for
information related to the product. A well-informed customer may able to
purchase better product for the same price.
Information search is not an easy task, one has to go through time-
consuming research, even spending for the process of looking for information.
There are several sources of information that are available for customers. The
primary sources of information are personal experiences, reference groups,
acquaintances, businesses or professionals. Business sources include advertising,
salespeople, websites, dealers or distributors while professional sources of
information include physicians, lawyers, teacher among others.

3. Evaluation of Alternatives
 This involves using the gathered information to evaluate alternative
brands in the choice set. In order to effectively evaluate alternatives, consumers
must:
a. Synthesize information
b. Establish decision criteria
c. Determine the type of alternatives
d. Compare alternatives

4. Purchase Decision

This is the stage where customers choose the particular product to

purchase from among the many alternative brands. However, two factors may
affect their purchase decisions. One is the perception or attitude of others about
the customer’s brand choice. This happen when a member in the family
disapproves of the chosen brand because of its price, quality, features or other
factors that contribute to the customer’s change of purchase decision. Another
factor is the unexpected situation, in the same way when a competing brand
offers a much lower price or a new product s launched in the market offering
better features, price or design.

5. Post-Purchase Behavior
This is the last stage in the buying decision process. Post-purchase
evaluation can be a learning experience for consumers. Companies must give
importance to the post-purchase evaluation of consumers because it will
determine whether they are satisfied or not with the purchased product. A
customer shows delight when the product he/she has purchased exceeds his/her
level of expectation. On the contrary, a customer becomes disappointed when
the product purchased falls short of his/her expectation. A customer is satisfied
when the product he/she purchased meets his/her expectations.

INDUSTRIAL MARKET AND BUYING BEHAVIOR

 Aside from the consumer market that purchases products for its own personal
consumption, there also exists the industrial market, which is a bigger market in terms
of quantity purchased. Industrial market or business to business (B2B) market purchase
products for further production or processing and manufacturing new products.

Industrial or B2B market includes the following:

1. Industrial Market – is composed of industries such as manufacturing, mining,
banking, retail trade, wholesale trade, services, transportation, public utilities
and communications.

2. Resellers – are individuals who buy goods and resell them to end-users at a
profit. Example of resellers are convenience stores, grocery stores, supermarkets
and department stores.

3. Government and Institutional Market- includes the local and national

government agencies and the public and private entities.

Characteristics of Industrial Market

1. Close Supplier and Customer Relationship
In industrial market, business relationships are often close and lasting. A
business relationship starts with a sale transaction. A good business relationship
created and maintained by directing the company’s marketing activities toward
creating and maintaining successful exchanges with the customers.
2. Derived Demand
Industrial market’s demand is derived. In other words, the demand for
goods and services is derived from the demand of the consumers. Thus, if
consumers’ demand for cars decreases, car manufacturer’s demand for tires, car
paints, car air condition, and other car accessories will also drop.
3. Direct Purchasing
Sales people from the manufacturing companies go to the industrial
market for product sales. Industrial market normally purchases products in
 volume. Thus, companies provide buyers (firms) technical assistance before,
during and after sales are made.
4. Geographically Concentrated Buyers
This allows manufacturers to easily reach their target market. When
buyers are concentrated geographically, manufacturers use more personal
selling; while if buyers are dispersed, media promotion is the best medium to
use. A beauty consultant in a department stores engages in personal selling
when she describes the benefits of a particular cosmetic brand to a customer
with the hope that the customer will be persuaded to purchase. Other personal
selling example includes cars, condominium units, equipment, raw materials and
other products sold by a sales person of a business enterprise or company to
another industrial customer.
5. Inelastic Demand
Many companies have inelastic demand. This means that the companies
demand for business products, which are not affected by price change. For
example, a decrease in the price of car tires will not cause the manufacturing
companies to buy more car tires.
6. Larger but Fewer Buyer
Industrial market normally interacts with fewer but larger buyers. Buyers
purchase in huge product quantity.
7. Leasing
This is common to most firms in the industrial market. Before, only large
equipment or expensive machineries were rented out, such as construction
equipment and warehouses. Nowadays, industrial market players like suppliers
and users lease other items such as delivery trucks for product distribution and
storage houses for inventories.
There are advantages when an industrial player, either buyers or sellers,
leases. Some of these advantages are:
a. Through leasing, a firm can still use its investment capital for other
purposes.
b. Leasing is best for firms that have temporary needs for equipment or
storage particularly when there is construction going on.
 c. Leasing is good decision for firms that have small investments and
firms that are new in the industry or just starting. This means that the
firm need not have to immediately buy equipment or machinery.
d. Leasing is also an effective way of getting distribution for new products.
Thus, potential users may be more willing to rent than buy.

8. Professional Purchasing
Unlike the consumer market, wherein purchasing decisions can be done by
anyone without undergoing training, purchasing and selling in the industrial
market necessitate either the firms seller or buyer to undergo professional
training to effectively close a sale. Expertise in the area of sales or business is a
must.
9. Reciprocity
This means the company will purchase products from a firm (seller) only if the
seller will also purchase products from the buyer. Firms practice reciprocity as a
solution to a declining sales volume.
10. Several Buying Influences
In the industrial market, a team of buyers on the firm normally influences
buying decisions.

TYPES OF BUYING SITUATION

1. Straight Rebuy - describes a situation where a firm reorders on a regular basis

2. Modified Rebuy - describes a buying decision where a firm wants to make some
changes to product specifications, process, delivery or payment requirements
and other terms.

3. System Purchase - involves a total solution to the buyers problem of not making
separate purchases and decisions

4. New Tasking Buying – refers to purchasing products for the first time.

PARTICIPANTS IN THE BUYING CENTER

 The group of people within an organization that makes purchase decisions is said
to form the buying center. Gilbert Harell (2002) stated that there are six participants in
the buying center, namely:
1. The Gatekeeper – refers to the first person that a sales representative gets in
contact with. Gatekeepers control the flow of business information into the
buying center or firm.

2. Information Seeker - searches for date that can be used during the purchasing
process.

3. Advocates- are people who influence the buying center decisions. Their
influence is obtained from their expertise on particular topic and with their skills
in interacting with other people outside the organization.

4. Users - are members of the organization who will use the product. They initiate
the purchase of the product and provide information as to specifications.\

5. Decision Makers – are people who choose and approve the suppliers or
providers of products.

6. Buyers – are people who have the authority to contact suppliers and negotiate
terms for products to be ordered or purchased.

ASSIGNMENT
Concept Application:
1. Explain the role that each member of the family plays in the following:
o Purchase of new appliances
o Choice of buying a new car
o Choice of place for family outing
o Choice of restaurant