WRITTEN

REPORT
(CONSUMER BUYING BEHAVIOR)

Santia, Charles Kobe

Frias, Alissa Camille
Climaco, Rio
Visperas, Julie Ann
Ferrera, Ricah Jane

BSBA II – 5

Consumer Buying Behavior

  The sum total of a consumer's attitudes, preferences, intentions, and decisions regarding
the consumer's behavior in the marketplace when purchasing a product or service.
 The study of individuals, groups, or organizations and all the activities associated with
the purchase, use and disposal of goods and services, including the consumer's emotional,
mental and behavioral responses that precede or follow these activities.

Motivation

 One way that marketers used this hierarchy is by identifying their product with a certain
level of needs.
 Another way that marketers used this hierarchy is to offer an extended brand line that
encourages a customer to reach ever higher in the pyramid.
 Yet another way that the hierarchy is used is when brand managers think about
positioning their brands as high in the pyramid as possible.
 A final means of distinguishing consumer motivations is whether they are risk seeing or
risk averse.
Attitude and Decision Making

 Attitude and decision making affect the extent to which the consumers will buy a
particular brand, repeatedly purchase it, becomes loyal, recommend it to others, and be so
loyal as to be insensitive to price increases.
 Marketers need to understand how to enhance attitudes about brands.
 Attitudes are conceptualized as a mix of beliefs and importance weights.
 Beliefs are opinions while importance weights are like the concept of customer
involvement.
 Attitudes contribute to decision making and brand choice.

How do Cultural Differences affect Consumers’ Behavior?

 Social class is a construct that is more complicated than just economic access to
resources.

2 types

1. Old-monied people

- seeks exclusivity in their brands to affirm special standing in society.

2. Nouveau riche

- are trying to make purchases to attain their status.

 Age cohort also produces reliable, predictable shopping patterns.

 Age groups are particularly important when they are large.
 Social class and age cohort are among the various socio-cultural factors that impinge
upon how buyers form impressions and preferences, collect information, form opinions,
and make brand choices.

 Gender matters–men and women are socialized differently, they think about products
differently and they shop differently.

 Ethnicity and country culture provide different perspectives, and they can be very
interesting.
CROSS CULTURAL CONSUMER DIFFERENCES

Cross-cultural consumer analysis is defined as the effort to determine to what extent the
consumers of two or more nations are similar or different.

A major objective of cross-cultural consumer analysis is to determine how consumers in two or

more societies are similar and how they are different.

FOUR PRIMARY DIMENSIONS TO DIFFERENTIATE COUNTRIES

 Power Distance – is the extent to which a culture is delineated between those who have
power and those who did not.
- Power distance refers to the way in which power is distributed and the extent to
which the less powerful accept that power is distributed unequally.

Example: Australia, for example, is a low power distance country while Asian countries
such as Hong Kong are at the high power distance side of the spectrum. People in high
distance countries tend to believe that power and authority are facts of life.

 Cultures also vary along the continuum from individualism- Culture refers to the
patterns of values and learned behaviours that are shared and transmitted from generation
to generation by the members of a social group. “Values” as used here includes beliefs,
assumptions, and attitudes.
 Countries and cultures differ on whether they are characterized as masculine -
masculine culture or masculine society is one that stresses different expectations for
men and women. In a masculine culture, men are expected to be assertive, competitive,
and focused on material success. Women are expected to be nurturing and focused on
people and quality of life.
 Uncertainty avoidance- “In cross-cultural psychology, uncertainty avoidance is a
society’s tolerance for uncertainty and ambiguity. It reflects the extent to which members
of a society attempt to cope with anxiety by minimizing uncertainty.

MANAGERIAL RECAP
  Marketing managers can be nimble and adaptive to industry changes if they have
basic understanding consumer behaviour.

THREE MAJOR PHASES OF CONSUMPTION ARE PRE-PURCHASE, PURCHASE,

POST-PURCHASE

There are major classes of Purchase:

1. These are called convenience, shopping and specialty.

2. These are called straight rebuy, modified rebuy and new buy.

HOW DOES CONSUMER THINK?

 They begin with sensing and perceiving information which may be learned and stored
memory.
 Motivations help marketers understand that consumers are seeking so that they can
make consumers satisfied with their purchases.
 Attitude and decision making are subject to influence by good information as well as
biases.
 Social norms, such as generational preferences or choices based on wealth also define
us.

HOW TO PREP CASE: EFFECTIVE CASE ANALYSIS FOR CLASS OR FOR AN

INTERVIEW

STEP 1: Situation Analysis

- Which achieved primarily 5C’s

- The company is described as are the current customer base, the action of
competitors, the collaborators, and the industry context.

STEP 2: Involves Identify the focal dilemma

- SWOT ANALYSIS

STEP 3: Propose Solutions

 - It is informative and persuasive if the suggestion about what the company should
do is supported with an explanation of the why that is show the solution are being
generated and evaluated.
-

A Model of Consumer Behavior

At one time, marketers could understand consumers through the daily experience of selling to
them. But the growth of companies and markets has removed many marketing managers from
direct contact with customers. Increasingly, managers have had to rely on the 7 O’s framework
for consumer research to answer the following key questions about any market.

Who constitutes the market? Occupants

What does the market buy? Objects

Why does the market buy? Objectives

Who participates in the buying? Organizations

How does the market buy? Operations

When does the market buy? Occasion

Where does the market buy? Outlets

Major Factors Influencing Buying Behavior

 (A) Cultural factors

Exert the broadest and deepest influence on consumer behavior. The roles played by the
buyer’s culture, subculture, and social class are particularly important.
1. CULTURE

Culture is the most fundamental determinant of persons’s needs and wants. Culture can
be defined as: the way of living, way of doing, and way of worshiping. The growing
child acquires a set of values, perceptions, preferences, and behaviors through his or her
family and other key institutions that control his or her behavior.

For example:

Linda Brown’s interest in computers reflects her upbringing in a technological society.

Linda knows what computers are and she knows that the society values computer
expertise. In another culture, say a remote tribe in central Africa. A computer would
mean nothing. It would simply be a curious piece of hardware, and there would be no
buyers.

2. SUBCULTURES
Subcultures include nationalities, religions, racial groups, and geographical regions.
Many subcultures make up important market segments, and marketers often design
products and marketing programs tailored to their needs.
Subcultures include:
Nationality: every nation has its own unique culture that shapes and controls behaviour
its citizen.
Religion: every religion has its culture in terms of rules, values, ituals, and procedures
that have impact on its followers
Racial Groups: in each culture, we find various racial groups; each of them tends to be
different in terms of needs, roles, profession, habits, preference, and use of products.
 Each group responds differently to marketing offers due to different cultural
backgrounds.
Geographical Regions: each geographic region represent specific cultures and differs in
terms of needs, preference, habits, usage rates, and uses of products. Clothing, residence,
food, vehicle, etc., are determined by regional climate and culture.
3. CULTURE OF SOCIAL CLASSES
Social classes are homogenous and enduring divisions in a society, which are
hierarchically ordered and whose members are share similar values, interest, and
behaviour. Social classes reflect differences in income, occupation, education, their roles
in society, and so on. Every social class has its culture that affects behaviour of its
members. Social classes differ in their dress, speech patterns, recreational preferences,
social status, value orientation, etc..They show distinct product and brand preferences in
many areas like clothing, home furniture, education, leisure activities and automobiles.

CHARACTERISTICS OF SEVEN MAJOR U.S SOCIAL CLASSES

1. UPPER UPPERS (less than 1%) - the social elite who live on inherited wealth
and have well-known families. They give large sums to charity, maintain more
than one home, and send their children to the finest schools. They are a market for
jewellery, antiques, homes, and vacations.
2. LOWER UPPERS (about 2%) – persons who have earned high income or
wealth through exceptional ability in the professions 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 status for themselves and their children, such as
expensive homes, schools, yacths, swimming pools, and automobiles. The
ambition of lower uppers is to be accepted in the upper uppers stratum.
3. UPPER MIDDLES (12%) – possess neither family status nor unusual wealth.
They are primarily concerned with “career.” They have attained positions as
professionals, independent business persons, and corporate managers. They are
the quality market for good homes, clothes, furniture, and appliances. They are
home-oriented and enjoy entertaining friends and clients.
 4. MIDDLE CLASS (32%)- average-pay white and blue-collar workers who live
on “the better side of town” and try to “do the proper things.” Often, they buy
products that are popular to keep up with the trends. Twenty-five percent own
imported cars, and most are concerned with fashion, seeking”one of the better
brand names.” The middle class believes in spending more money on “worthwhile
experiences” for their children and aiming them towards a college education.
5. WORKING CLASS (38%) – Average-pay blue-collar workers and those who
lead a working-class lifestyle, whatever their income, school background, or job.
The working class depends heavily on relatives for economic and emotional
support, for tips on job opportunities.
6. UPPER LOWERS (9%) – Upper lowers are working, not on welfare, although
their living standard is just above poverty. They perform unskilled work and are
often, upper loers are educationally deficient.
7. LOWER LOWERS (7%) – Lower lowers are on welfare, visibly poverty
stricken, and usually out of work. Some are not interested in finding a permanent
job and most are dependent on public aid or charity for income. Their homes,
clothes, and possessions are often viewed as “dirty”, “raggedy”, and “broken-
down”.

 (B) SOCIAL FACTORS

Social factors affect consumer behaviour. Consumer response to product, brand, and
company is notably influenced by a number of social factors such as: family, reference
groups, and roles and statuses.
1. FAMILY
Family is one of the most powerful social factors affecting consumer behaviour. This
is more significant where there is joint family system, in which children use to live
with family for longer time. Values, traditions, and preferences are transmitted from
parents to children inherently.
From family, its member acquires an orientation toward religion, politics, ambition,
self-worth, love, respect, and so on. In every family, elders, husband-wife, other
 members, and children have varying degree of influence on purchase decisions.
Husband dominant, wife dominant, children dominant and equal dominant.

Example.
Husband dominant – life insurance, automobiles/cars, television
Wife dominant – washing machine, furniture, kitchenware
Children dominant – clothes, gudgets,
Equal – housing, outside entertainment
2. REFERENCE GROUP
A person’s reference groups consists of all the groups that have a direct (face-toface)
or indirect influence on the person’ attitudes or behavior. Groups having a direct
influence on a person are called MEMBERSHIP GROUPS. Some membership
groups are primarily groups, such as family, friends, neighbours, and co-workers,
with whom the person interacts fairly continuously and formally. People also belongs
to secondary groups, such as religious, professional, and trade union groups, which
tend to be more formal and requires less continuous interaction.

3. ROLES AND STATUSES

A person participates in many groups throughout life. Family, clubs, organizations.
The person’s position in each group can be defined in term of role and status.
A role consists of the activities that a person is expected to perform. For example
Linda with her parents, she plays the role of daughter; in her family, she plays wife
and mother; in her company she plays sales manager. Each of Linda’s role will
influence some of her buying behavior.
Each role carries a status. A Supreme Court justice has more status than sales
manager, and a sales manager has more status than an office clerk. People choose
products that communicate their role and status in society.
For example: Kobe is the company president often drive Mercedes Benz, wear
expensive suits, and drink Chivas Regal Scotch.
Marketers are aware of the status symbol potential of products and brands.
 (C) PERSONAL FACTORS
A buyer’s decisions are also influenced by personal characteristics. These include the
buyer’s age and stage in the life cycle, occupation, economic circumstances, lifestyle, and
personality and self-concept.
1. AGE AND STAGE IN THE LIFE CYCLE
People buy different goods and services over their lifetime. They eat baby food in the
early years, most foods, in the growing and mature years, and special diets in the later
years. People’s taste in clothes, furniture, and recreation is also age related.

2. OCCUPATION
A person’s occupation also influences his or her consumption pattern. A blue-collar
worker will buy work clothes, work shoes, and lunch boxes. A company president
will buy expensive suits, air travel, country club membership, and a large sailboat.
Marketers try to identify the occupational groups that have above-average interest in
their products and services. A company can evev specialize its products for certain
occupational groups. Thus computer software companies will design different
computer software for brand managers, engineers, lawyers, and physicians.
3. ECONOMIC CIRCUMSTANCES
Product choice is greatly affected by one’s economic circumstances. People’s
economic circumstances consist of their spendable income, savings, and assets.
Debts, brrowing power, and attitude toward spending versus saving.
For example: Ricah can consider buying laptop computer if she has enough spendable
income, savings, or borrowing power and prefers spending to saving.
4. LIFESTYLE
A person’s lifestyle is the person’s pattern of living in the world as expressed in the
person’s activities, interest, and opinions. Lifestyle portrays the whole person
interacting with his or her environment.
For example, Ali can choose to live a belonging lifestyle by wearing a conservative
clothes, spending a lot of time with her family, and helping her church. Or she can
 choose an achiever lifestyle by working long hours on major projects and playing
hard at travel and sports.
5. PERSONALITY AND SELF-CONCEPT
Each person has a distinct personality that influences his or her buying behavior.
Personality, means a person’s distinguishing psychological characteristics that lead to
relatively consistent and enduring responses to his or her environment. Personality is
usually described in terms of such traits as self-confidence, dominance, autonomy,
deference, sociability, defensiveness, and adaptability.
Related to personality is a person’s self-concept or self- image. It is what person
believes of him. There can be actual self-concept (how he views himself) ideal self-
concept (how he would like to view himself) and others-self-concept (How he thinks
other see him)
 (D) PSYCHOLOGICAL FACTORS
A person’s buying choices are influenced by four major psychological factors
motivation, perception, learning, and beliefs and attitudes.
1. MOTIVATION
A person’s has many needs at any given time. Some needs are biogenic; they are
arise from physiological estates of tension such as hunger, thirst, discomfort.
Other needs are psychogenic; they arise from psychological states of tension such
as the need for recognition, esteem, or belonging.
Motivation comes from motive; motive is expression of needs or intensified need
become a motive.

People hold one or more of the following motives to buy:

o To satisfy basic needs like hunger, thirst, or love

o To protect from economic, physical or mental hazards
o To be recognized or appreciated
o To be respected
o To be self-actualized
o To avoid physical or mental stress
o
 2. PERCEPTION
Is the process by which an individual selects, organizes, and interprets
information inputs to create a meaningful picture of the world.
3. LEARNING
When people act, they learn.
Learning involves change in an individual’s behavior arising from experience
4. BELIEFS AND ATTITUDES
Through doing and learning. People acquire beliefs and attitudes. These in turn
influence their buying behavior.
A belief is a descriptive thought that a person holds about something. An attitude
is a person’s enduring favorable evaluations, emotional feelings, and action
tendencies toward some object or idea.

VALUE LIFESTYLE VALS

Introduced in 1978, SRI International's Values and Lifestyles (VALS) framework has been the
only commercially available psychographic segmentation to gain widespread acceptance.
Through a proprietary research program initiated in 1960, SRI designed its original VALS
system to yield insights into why people believe and act as they do; how internal values and
attitudes are expressed as eternal lifestyles. The major tendencies of the four groups with greater
resources are:

 Actualizers: Successful, sophisticated, active, "take-charge" people. Purchases often

reflect cultivated tastes for relatively upscale, niche-oriented products.
 Fulfilleds: Mature, satisfied, comportable, reflective. Favor durability, functionality and
value in products
 Achievers: Successful, career- and work-oriented. Favor established, prestige products
that demonstrate success to their peers.
 Experiencers: Young, vital, enthusiastic, impulsive, and rebellious. Spend a
comparatively high proportion of their income on clothing, fast food, music, movies, and
video.
 The major tendencies of the four groups with fewer resources are:
  Believers: Conservative, conventional, and traditional. Favor familiar products and
established brands.
 Strivers: Uncertain, insecure, approval-seeking, resource constrained. Favor stylish
products that emulate the purchases of those with greater material wealth.
 Makers: Practical, self-sufficient, traditional, family oriented. Favor only products with a
practical or functional purpose such as tools, utility vehicles, fishing equipment.
 Strugglers: Elderly, resigned, passive, concerned, resource constrained. Cautious
consumers who are loyal to favorite brands.

BELIEFS AND ATTITUDES

Through doing and learning, people acquire beliefs and attitudes. These in turn influence buying
behavior.

● A belief is a descriptive thought that a person holds about something. Linda Brown may
believe that an IBM computer has a large memory, stands up well under rugged usage, and costs
$2,000. These beliefs may be based on knowledge, opinion, or faith. They may or may not carry
an emotional charge. For example, Linda Brown's belief that an IBM laptop computer is heavier
than an Apple might not matter to her decision.

Particularly important to global marketers is the fact that buyers often hold distinct beliefs about
brands or products based on their country of origin. Several country-of-origin studies have found
the following:

 The impact of country of origin varies with the type of product. Consumers would want
to know where a car was made but not where the lubricating oil came from.
 Certain countries enjoy a reputation for certain goods: Japan for automobiles and
consumer electronics; the United States for high-tech innovations, softdrinks, toys,
cigarettes, and jeans; and France for wine, perfume, and luxury goods.
 The more favorable a country's image, the more prominently the "Made in label should
be displayed in promoting the brand.

● Attitudes toward country of origin can change over time. Note how Japan has greatly improved
its quality image in comparison to pre- World War II days.
ATTITUDE - is a person's enduring favorable or unfavorable evaluations, emotional feelings,
and action tendencies toward some object or idea. People have attitudes toward almost
everything: religion, politics, clothes, music, food, and so on. Attitudes put them into a frame of
mind of liking or disliking an object, moving toward or away from it. Thus Linda Brown may
hold such attitudes as, "Computers are an essential tool for professional workers." The IBM
computer is therefore relevant to Linda because it fits well into her preexisting attitudes. A
computer company, the product, and the brand. Thus a company would be well advised to fit its
product into existing attitudes rather than to try to change people's attitudes.

Of course, there are exceptions where the great cost of trying to change attitudes might pay off.
Here are two example of food organizations that used ad campaigns to change consumer
attitudes, with handsome results:

 California Raisins When California raisin growers found themselves with a huge surplus,
they faced a major obstacle in consumer attitudes toward the wrinkled little snack.
Research showed that consumers were aware that raisins are nutritious, they thought they
were "boring". Enter the California Raisin Advisory Board and its dancing raisin ads. The
campaign, featuring Claymation raisins dancing to Marvin Gaye's "Heard It Through the
Grapevine," had emotional appeal and is credited with wiping out the state's raisin
surplus.
 The National Pork Council By 1985 pork consumption had dropped to 59 pounds per
capita from high of 68 pounds in 1980. The nation was on an anti-beef and anti-pork
kick, favoring leaner, less cholesterol-laden poultry. While pork products were actually
improved as a result of new feeding and breeding methods, the public still considered
pork an unhealthy choice.

THE BUYING PROCESS

To be successful, marketers have to go beyond the various influences on buyers and develop an
understanding of how consumers actually make their buying decisions. Specifically, marketers
must identify who makes the buying decision, the types of buying decisions, and the steps in the
buying process.

BUYING ROLES
It is easy to identify the buyer for many products. Men normally choose their shaving equipment,
and women choose their pantyhose. But even here marketers must be careful in making their
targeting decisions, because buying roles change.

We can distinguish five roles people might play in a buying decision:

 Initiator: A person who first suggests the idea of buying the product or service
 Influencer: A person whose view or advice influences the decision
 Decider: A person who decides on any component of a buying decision- whether to buy,
what to buy, how to buy, or where to buy
 Buyer: The person who makes the actual purchase
 User: A person who consumes or uses the product or service

BUYING BEHAVIOR- Consumer decision making varies with the type of buying decision.

COMPLEX BUYING BEHAVIOR- Consumers engage in complex buying behavior when

they are highly involved in a purchase and aware of significant differences among brands.

DISSONANCE-REDUCING BUYER BEHAVIOR- Sometimes the consumer is highly

involved in a purchase but sees little difference in the brands.

HABITUAL BUYING BEHAVIOR - Many products are bought under conditions of low
consumer involvement and the absence of significant brand differences.

VARIETY-SEEKING BUYING BEHAVIOR- Some buying situations are characterized by

low consumer involvement but significant brand differences.

THE STAGES OF THE BUYING DECISION PROCESS

 Problem Recognition The buying process starts when the buyer recognizes a problem or
need.
 Information Search An aroused consumer will be inclined to search for more information.
Of key interest to the marketer are the major information sources to which the consumer
will turn and the relative influence each will have on the subsequent purchase decision.
Consumer information sources fall into four groups:
  Personal sources: Family, friends, neighbors, acquaintances
 Commercial sources: Advertising, salespersons, dealers, packaging, displays
 Public sources: Mass media, consumer-rating organizations
 Experiential sources: Handling, examining, using the product

Evaluation of Attributes

There is no simple and single evaluation process use by all consumers or by one consumer in all
buying situations. There are several decision evaluation processes, the most current models of
which see the consumer evaluation process as cognitively oriented.

Some basic concept will help us understand consumer evaluation processes. First, the consumer
is trying to satisfy needs. Second, the consumer is looking for certain benefits from the product
solution. Third, the consumer sees each product as a bundle of attributes with varying abilities
of delivering the benefits sought to satisfy this need. The attributes of interest to buyers vary by
product:

Cameras: picture sharpness, camera speed, camera size, price

Hotels: location, cleanliness, atmosphere, price

Mouthwash: color, effectiveness, germ-killing capacity, taste/flavor, price

Tires: safety, treads life, ride quality, price

Consumer differs as to which product attributes they see as most relevant as well as on the
importance of weights they attach to each attributes. The market for a product can often be
segmented according to the attributes that are salient to different consumer group.

The consumer develops a set of brand beliefs about where each brand stands on each attributes.
The sets of belief about a brand make up the brand image.

PURCHASE DECISION

In the evaluation stage, the consumer forms preferences among the brands in the choice set. The
consumer may also form an intention to buy preferred product. However, two factors can
intervene between the purchase intention and purchase decision.
1. Attitudes to others

2. Unanticipated situational

5 Purchase Sub decision

1. Brand decision 4. Timing decision

2. Vendor decision 5. Payment method decision
3. Quantity decision

POST PURCHASE BEHAVIOR

After purchasing the product, the consumer will experience level of satisfaction and
dissatisfaction. The marketer’s job does not end when the product is bought but continues into
the post purchase period.

POST PURCHASE SATISFACTION

After purchasing a product, a consumer may detect a flaw. Some buyers will no longer want the
flawed products, others will be indifferent to the flaw but some sees it as enhancing the product’s
value.

POST PURCHASE ACTIONS

The consumer’s satisfaction or dissatisfaction to the product will influence subsequent behavior.
If the consumer is satisfied, he or she will exhibit a higher probability to purchase the product
again but when they are dissatisfied, they will abandon or return the product they purchase.