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CONSUMER PSYCHOLOGY “A study that deals with activities that directly involved in selecting, obtaining, and using products and services and ideas to satisfy needs and desires, including decision processes that precede and follow these actions. “ Davis and Palladino (1995)
CONSUMER BEHAVIOR “The study of the buying units and exchange processes involved in acquiring, consuming and disposing of goods, services, experiences and ideas.” Mowen (1995)
THEORIES IN DEVELOPMENT OF CONSUMER BEHAVIOR The Rational Consumer Choice TheoryThe Opportunity Set or Budget Constraint TheoryPreference Ordering
RATIONAL CONSUMER CHOICE THEORY The buying capacity of the consumer in dealing with the price of the product would depend on his present earning and is considered in the preferences.Two steps to carry out preferences:1) Describe the various combinations of goods the consumer is able to buy (income level & prices).2) To select among feasible combinations the particular one the consumer prefers to all others.
THE OPPORTUNITY SET/BUDGET RESTRAINT THEORY Summarizes the combinations of bundles of goods that the consumer is able to buy Determined both in income and prices The consumer’s task is to select the particular one he likes the best To recognize bundle, there is a need to summarize, the consumer’s preferences to those possible bundles he might consume
PREFERENCE ORDERINGScheme that enables the consumer to rankdifferent bundles of goods in terms ofdesirability or order of preference.
NATURE OFCONSUMER BEHAVIORConsumers differ from others; their own purchasing behaviors would also vary from one product category to anotherThe number of effort and amount of time spend in decidingConsumers buying and consumption behavior for the same product would often vary because of the present situation they are in
NATURE OF CONSUMPTION Needs/Attitudes that influence consumption decisions Consumer Lifestyle Consumer Choice Behavior/Experiences that reduce, maintain, or enhance lifestyle
EXTERNAL FACTORS THATAFFECT CONSUMER BEHAVIOR Demographic Factors Economic Factors Situational Influences Social Influences Social Class Technological Influences
1) Demographic Factors: (demography: study of human populations ex: fertility, mortality, and migration) useful for providing basic consumer information but is limited cause they might be:a) Dated (census done every five years)b) Too general (data might be too broad)c) Require profile analysis because a single demographic statistics is not often usefuld) Social and psychological factors influencing consumer behavior is not considered
2)Economic Factors: general state of the economy and the state of individual finances the influences customer-buying behavior (ex: inflation)3)Situational Influences: consumer-purchasing behavior is affected by situations. The following are situational influences: a) Purchase Task- there is a reason for the purchase being made (buying of items for gifts on weddings, birthdays)
b) Social Surroundings- presence of a shopping companion (close friend, relative from abroad, lover)c) Physical Surroundings – crowds in stores, music display, attractive sales persond) Temporal Aspects – time of the day, day of the week (weekday or weekends), weathere) Antecedent – states such as moods (happy, sad), the amount or lack of cash at hand
4) Social Influences - Social factors that can change purchasing decisions. The following are the social influences: a) Culture – way of living which includes attitudes, values , religion etc. b) Reference Groups – an individual identifies with a reference groups, making the group the standard norm (barkadas, idolized groups, religious groups) c) Family – most immediate and continuous source of group
Social Influence – Family :4 types of family decision-making structures (Herbst, citedin Llanes et al., 1996)c.1. Automatic- husband & wife make decisions roughly anequal number of timesc.2. Wife-Dominant – wife makes majority of decisionswith little or no input from husbandc.3. Husband-Dominant – husband makes majority ofdecisions with little or no input from wifec.4. Syncratic – husband & wife jointly make the decision
5) Social Class : Culture’s social class structure ranks people according to the value such culture puts on factors as parent’s backgrounds, source of income, education, occupation.Philippines Social Class Structurea) Class A – (less than 5% of population) the “social elite”, live on inherited wealth, and comes from well known moneyed families (Ayala, Sy, Gaisano)b) Class B – (10-15% of the population) are professionals, business people with very comfortable incomes, living in villages and subdivisions.
c) Class C – (30% of the population) middle class compose of white and blue collar who earns average pay and lives in modest houses, which are located in urban areas and are often rented.d) Class D – these are the upper- lower class refers to the working poor who performs unskilled and menial jobs for minimal wages and some casuals paid on daily basis.6) Technological Influences : paves way to brand new products, products that develop quality of human life.
INTERNAL FACTORS THATAFFECT CONSUMER BEHAVIORLifestylePsychological Factors1) Lifestyle- the way people live which influences people’s interest in various goods , the goods consumed, the brands preferred
Factors that Determine and Influence Consumer LifestyleMarketing activities HouseholdsCulture EmotionsSubcultures PersonalityValues MotivesDemographics PerceptionSocial Status Learning (memory)Reference Groups
2) Psychological Factors a) Attitudes, Beliefs and Values Attitudes can be positive (favorable), negative (unfavorable), or neutral feelings of individual toward an object. Beliefs are strongly held opinions, not necessarily an objective fact. Value is a belief that something, a principle or an idea is worthwhile and important.
b) Learning: involves some change or modification of behavior to a new one, based on knowledge and experience in the market.c) Perception: is a process by which a person selects, organizes, and interprets stimuli or information received through the senses, into a meaningful and coherent picture of the world.d)Personality: each individual has a unique personality that may influence buying behavior. Personality refers to a person’s distinguishing characteristics that determine and reflect the person’s response to stimuli or environment.