1.
Chapter 5
Consumer Behavior
Mr. Anthony F. Balatar Jr.
Subject Instructor

2.
Introduction
As a consumer of various goods and services,
How do you decide on what you buy, and which size and variant, if any?
Why do you need this product and why buy this particular brand?
How do you choose where to shop?
When do you decide to shop? Why on this particular day and time?
How often do you shop?
Who do you shop with?

3.
Consumer Behavior
It is the study of how consumers (individuals, households,
groups, or organizations) decide to buy, use, and dispose of
goods, services, experiences, and ideas to satisfy their needs
and wants. These final buyers make up the consumer
market.

4.
Some Insights on the Consumption Behavior
of Filipino Consumers
(Source: rappler.com – factors explain Filipino buying behavior)
In the research conducted by Kantar Worldpanel, it was
noted that Filipinos put more importance in looking good,
citing 72% of the respondents wanted to improve their
hair and change their complexion. This translates to an
increase in sales in hair conditioners and whitening lotion.

5.
Some Insights on the Consumption Behavior
of Filipino Consumers
Filipinos want germ protection – there was a 19% growth
in the hand sanitizer sales from 2009 to 2013. Likewise,
wet tissue or baby wipes also saw an increase in sales.
There are now Filipinos who choose a healthy lifestyle by
doing physical activities and consciously buying healthy
products.

6.
Some Insights on the Consumption Behavior
of Filipino Consumers
Ironically, there was an increase in the demand for an
“instant” lifestyle, which increased the sales of instant
noodles, instant coffee, and ready-to-drink chocolate
drinks.

7.
Some Insights on the Consumption Behavior
of Filipino Consumers
Filipinos value accessibility, trust, and distance – which
may be the reason why malls and commercial centers
thrive in every corner in big cities.
According to Visa e-Commerce Consumer Monitor, 9 out
of 10 consumers see value in online shopping, and the top
reasons are convenience, price and deals.

8.
Consumer Decision-Making Process
Consumers make purchase decisions everyday – from
commuting to and from work or school to buying meals,
drinks, and snacks. When a consumer enters a supermarket,
there are even more decisions to make such as which brand
to buy, what size, how many, and which variants, among
others.

9.
Consumer Decision-Making Process
How do consumers respond to marketing efforts created by
marketers to promote their brands?
If the response is positive, the companies are doing great in
communicating with their consumers.
If the response is negative or if there is no response at all, the
companies may need to make adjustments to communicate
better with the market.

10.
Stimulus-Response Model of Buyer Behavior
(Kotler and Armstrong, 2014)
• Marketing stimuli
(product, price,
place, promotion)
• Other factors
(economic,
technological,
social, cultural)
• Buyer’s
characteristics
• Buyer’s decision
process
• Buying attitudes
and preferences
• Purchase behavior
• Brand and
company
relationship
behavior
Environment Buyer’s Black Box Buyer Responses

11.
Stimulus-Response Model of Buyer Behavior
(Kotler and Armstrong, 2014)
Based on the model, the buyer’s black box is central to
consumer’s decision making. In its core are the buyer’s
characteristics – demographics, psychographics, behavior –
where the buyer’s unique attributes reside.

12.
Stimulus-Response Model of Buyer Behavior
(Kotler and Armstrong, 2014)
The buyer’s black box is influenced by the environment. The
stimuli in the environment may motivate purchase or
awaken the desire to buy. The environment includes the
marketing mix – when a consumer sees a new product or if
his or her favorite item is on sale, it may stimulate purchase.
Other stimuli include external variables such as economic,
technological, social and cultural factors.

13.
Stimulus-Response Model of Buyer Behavior
(Kotler and Armstrong, 2014)
As a response to stimuli in the environment, the buyer
forms his or her own attitudes and preferences toward
certain brands and products.

14.
Activity #1
1. When was the last time you tried a new product? What
influenced you to buy it? Relate your experience to the
stimulus-response model of buyer behavior.
2. How important is understanding consumer behavior to
marketers?
3. What happens in the buyer’s mind from the arrival of
stimuli to his or her purchase decision?

15.
Consumer Decision-Making Process
Consumers go through consumer decision-making
process when making a purchase. However, there may be
times when a consumer may skip a step, like when he or she
is making a repeat purchase.

16.
Consumer Decision-Making Process
It consists of five stages:
Need
Recognition
Information
Search
Evaluation of
Alternatives
Purchase
Decision
Post-purchase
Evaluation

17.
Consumer Decision-Making Process
Need Recognition. In this stage, the buyer recognizes a
need or a problem. It can be triggered by internal stimuli,
like feeling thirsty or hungry. It can also be influenced by
external stimuli, such as when the consumer sees an ad of
a new phone model.

18.
Consumer Decision-Making Process
Information Search. When a consumer recognizes a need, he or
she would usually look for information about a product. Here are
some of the sources he or she can consider:
Personal Sources Recommendations of family and friends
Commercial Sources Advertisements, salespeople, web sites, shop displays
Public Sources Mass media (e.g. product feature in TV shows), consumer reviews
Experiential Sources Actual handling and examination of the product

19.
Activity #2
1. When you buy a new product, which source of
information do you consider the most credible? Why?
2. Cite a real-life experience wherein you apply the different
sources of information in purchasing the product.

20.
Consumer Decision-Making Process
Evaluation of Alternatives. There is no single formula for
consumers in their alternative evaluation. Some consumers
would impulsively buy an item, while others would have several
considerations such as budget, style, color, or specifications. For
those who choose based on budget, consumers usually would
go around to canvass about prices and freebies (if any). Some
consumers would rank their choices based on their preferences
and use this as their basis in making the purchase.

21.
Consumer Decision-Making Process
Purchase Decision. Purchase comes once the consumer
has decided on the product that he or she is buying. Two
factors may play a role between purchase intention and
purchase decision – attitude of others and unexpected
situational factors. The first factor comes into play when
someone important to you, tells you to get the lowest-
priced item instead of the one you prefer.

22.
Consumer Decision-Making Process
Purchase Decision. The second factor plays a role when, for
example, the specific model of the item you want is out of stock
or the more expensive second choice is suddenly on sale. During
purchase, the consumer makes a decision whether to pay in cash
or use a credit card, or pay in installment, if available. If there are
several retail channels that offer the same product, the consumer
will have to choose which retailer he or she should purchase from.

23.
Consumer Decision-Making Process
Post–purchase Evaluation. After purchase, the consumer will
evaluate if the product is able to meet his or her expectations or
not. Thus, the company’s job does not end when the consumer
has bought the product. If the consumer is satisfied, the
consumer will most likely buy from the same brand again in the
future, and will make positive recommendations of the product to
friends. However, if the consumer is unhappy, it may result to
negative word of mouth.

24.
Activity #3
You are marketing officer and the marketing manager has assigned
you to research the consumer decision-making process of customers
who buy a new cellphone. Your company will be soon be selling the
cellphone with a price of Php 15, 000, and your company wants to
know what customers to consider in getting a new cellphone. To make
the research valid, you are to interview (thru social media) about 10
people who have bought a new cellphone recently. Create a
powerpoint presentation of the consumer decision-making process of
cellphone customers, and present it to the marketing manager.

25.
Adoption Process
Marketers also want to understand the thought process of
consumers in buying new products. A new product is any
good, service or idea that is perceived by some potential
customers as new, even if it may have been around for a
while. Marketers want to know how consumers learn about
products for the first time and how their interest develops to
the adoption of the new product.

26.
Adoption Process
It is called the adoption process, which is the mental
process an individual goes through from awareness of a new
product to the decision to become a regular user of that
product. The five stages in the adoption process are:
awareness, interest, evaluation, trial, and adoption.

27.
Adoption Process
It consists of five stages:
Awareness Interest Evaluation Trial Adoption

28.
Adoption Process
Awareness – a consumer becomes aware of the product
through an advertisement or a flyer, or may have heard about it
from a friend.
Interest – a consumer lacks information about it, he or she
seeks through research.
Evaluation – a consumer has enough information to consider
buying the product.

29.
Adoption Process
Trial – a consumer try the new product on a small scale
for him or her to gauge the value of the product.
Adoption – a consumer decides to purchase and use the
new product.

30.
Adoption Process
Consumer differ in their readiness and willingness to adopt a
new product. Thus, there are five adopter groups:
innovators, early adopters, early mainstream, late
mainstream, and lagging adopters.

31.
Adoption Process
New
Product
Lagging
Adopters
Early
Adopters
Late
Mainstream
Early
Mainstream
Innovators

32.
Adoption Process
Five Adopter Groups:
Innovators – are the first ones who get their hands on any new
product or technology. They are willing to take risks in trying
innovative products.
Early adopters – are opinion leaders--- they have a following
and adopt ahead of the mainstream users but do so carefully.

33.
Adoption Process
Five Adopter Groups:
Early mainstream – are people who adopt technology before
the average person does.
Late mainstream – are people who would adopt innovation
only after a lot of people have already tried it.
Lagging adopters – are the most traditional and will not
adopt the innovation until it becomes the norm.

34.
Activity #4
Remember the first time you bought a cellphone or any
electronic gadgets. Did you go through the adoption
process? How would you categorize yourself according to
the different adoption groups? Explain.

35.
Factors that Influence Consumer Buying
Decisions
Consumers are influenced by different factors prior to
purchase. These factors, and more often than not, marketers
have no control over them--- but it is important for
companies to understand them.

36.
Factors that Influence Consumer Buying
Decisions
BuyerCultural
Social Personal
Psychological

37.
Factors that Influence Consumer Buying
Decisions
1. Cultural Factors. Every group or society has a culture. It
is the most basic influencer in a person’s decision-making.
As people grow up in a society, cultural norms shape their
basic values, perceptions, wants, and behaviors. These are
learned from the parents, other family members, church,
school, and other important institutions.

38.
Factors that Influence Consumer Buying
Decisions
2.Social Factors. Because consumers interact with
different people everyday, social factors play an important
role in influencing consumer choices. These include small
groups, family, and social roles and status.

39.
Factors that Influence Consumer Buying
Decisions
Small Groups. It can be a membership group where the
consumer belongs (e.g., a school club or a group of
friends) or an aspirational or reference group that an
individual wishes to belong to. Reference groups open the
eyes of consumers to a totally different set of behaviors
and lifestyles that influence decision-making.

40.
Factors that Influence Consumer Buying
Decisions
Social Media. It has become an important influencing
factor in consumer choices. This is called word-of-mouth
influence. Because you trust the people in your social
circle, you see their posts and recommendations as honest
and credible opinions on certain products. It resulted in
instant popularity, which drove sales for the company and
created a positive image of the brand.

41.
Factors that Influence Consumer Buying
Decisions
Social Media. On the other hand, this type of marketing
influence can also break a company. Because of the viral
nature of how a post spreads, negative feedback on social
media can break the image of a brand.

42.
Factors that Influence Consumer Buying
Decisions
Buzz marketing. Uses opinion leaders – people who
have the knowledge, personality, and expertise to exert
social influence on others – in order to promote brands.
Popular bloggers as well as celebrities have been tapped to
become brand ambassadors. People with hundreds of
thousands or millions of followers on social media are
usually tapped, for a fee, to post about a company’s brands.

43.
Factors that Influence Consumer Buying
Decisions
Family. They have the greatest influence on consumers’
product choices. Loyalty to a brand sometimes starts during
childhood, and this is influenced by what the parents purchase
for the household. Children also influence purchase behavior of
parents. Parents may choose to stay in hotels that have child-
friendly playgrounds and areas where kids can do different
activities.

44.
Factors that Influence Consumer Buying
Decisions
Role and Status. A person’s role and status may also
influence his or her purchase behavior. Capability to buy,
economical-wise, or practical wise persons are the factors
under this.

45.
Factors that Influence Consumer Buying
Decisions
3.Personal Factors. It includes person’s age and life cycle
stage, occupation, economic situation, lifestyle and
personality. Personal characteristics will always influence
purchase decisions.

46.
Factors that Influence Consumer Buying
Decisions
4.Psychological Factors. It includes recognition, self-
esteem, and achievement. A need becomes a motive
when it is strong enough to warrant an action or seek
satisfaction. Aside from motivation, learning and beliefs
and attitudes are psychological factors in consumer
buying decisions.

47.
Factors that Influence Consumer Buying
Decisions
Motivation. It is a key component in a consumer
purchase. It is what drives buyers to satisfy a need.
Learning. It is a response arising from an experience.
Beliefs and Attitudes. It shapes based on one’s value
system. A belief is a perception or a thought of a person
about something, which may have been based on
knowledge, opinion, or faith.

48.
Factors that Influence Consumer Buying
Decisions
Beliefs and Attitudes. An attitude is “a person’s
relatively consistent evaluations, feelings, and tendencies
towards an object or idea”.

49.
Activity #4
1. Cite your specific personal or other person’s experiences
on different factors that influence consumer buying
decisions.
2. Why do you think it is important for marketers to know
these factors?

50.
Types of Buying Decision Behavior
1. Complex buying behavior – purchases that require
more thinking and involvement from the consumers.
2.Dissonance-reducing buying behavior – occurs when
consumers are involved with a non-routine purchase but
see little difference among brands.

51.
Types of Buying Decision Behavior
3.Habitual buying behavior – purchases of products that
are regularly bought by consumers, and thus require low
involvement.
4.Variety-seeking buying behavior – occurs when
consumers who like trying different products.

52.
Business versus Personal Consumers
Personal Consumers – are conscientious buyers who
consider different factors before making non-routine
purchases.
Business Consumers – have to meticulously consider
different requirements by the company.

53.
Activity #5
1. Cite three (3) specific examples on different buying
decision behavior.
2. Provide at least two (2) examples of business consumers
and personal consumers.