PRE-TEST

Multiple Choice. Encircle the letter of the correct answer.

1. Individuals who purchase goods/services for personal use

a. consumers
b. buyers
C. purchasers
d. industrial

2 A type of market that is composed of professional and trained sellers or

Buyers
a. Consumer
b. buyer
C. purchaser
d. industrial

3. The changes in an individual’s behavior arising from experience

a. learning
b. perception
C. experience
d. attitude

4. The concept that refers to basic values and behavior learned

a. culture
b. learning
c. perception
d. attitude

5. The ordered division in society where members have the same values and interests
a. social class
b. culture
c. Family
d. friends

6. The group or class of individuals who lives in inherited wealth

a. Class A
b. class D
c. elite
d. rich

7. The class or group of working individuals who performs unskilled and

menial jobs for minimal wages
a. class A
b. class D
 c. employee
d. workers

8. The activities people are expected to perform

a. roles
b. status
C. jobs
d. tasks

9. A situation where companies perform a reorder in a routine basis

a. straight rebuy
b. modified rebuy
C. new task situation
d. systems selling

10. Persons who utilize products after purchase

a. customers
b. influencers
c. users
d. buyers

11. The person’s interpretation of information to form a meaningful picture

a. experience
b. perception
C. learning
d. knowledge

12. The level of needs that emphasizes the need for food and clothing
a. safety needs
b. social needs
C. physiological needs
d. self-esteem needs

13. Factor that consists of motivation, perception, and learning

a. family
b. cultural
C. psychological
d. social

14. The basic unit of society

a. barangay
b. family
C. house
 d. community

15. The consumers’ effort to search for more information about a product
a. information search
b. knowledge
C. study
d. product research
MODULE 4 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 every day. 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 products 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’s purchasing decisions;
3. identify the industrial market and its characteristics; and
4. discuss the types of buying situation and the participants in the buying center.

KEY TERMS:
Black box new task
Consumer behavior perception
Consumer buying behavior reference group
Consumer market social class
Culture social factor
Gatekeepers straight rebuy
Industrial market sub-culture
Motivation

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 service.

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 control 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 in the 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, Kapampangans, llocanos,
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 known 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 own 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 conveniences 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 the 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.
Some marketing men include people “with no visible means of livelihood” beggars in this group.
Whereas, others prefer to label the obviously unemployed slum members in a separate category
known as class X (lower-lower):

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 wishes 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 their 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 works as a Department manager. In his office, he is someone
who leads his team; at home, he plays the role of 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 tor 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 prefers 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 to
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 attire 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 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 is saved tor this purpose.
Personality is the totality of a 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 need as identified by
Abraham Maslow in his hierarchy of needs.
Another psychological factor that affects buyers’ decision is their perception about a
product, a service, or a 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 more
products from that brand and will even be promoting the brand unconsciously through word of
mouth.

BUYER’S 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 in deciding to purchase a product is 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 a classmate with the latest cell
phone 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 information related to the
product. A well-informed customer may be able to purchase better product for the same
price.
Information search is not an easy task; one has to go through to time-consuming
research, even spending for the process of looking 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, teachers, 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; and (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 happens 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 is 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
purchase 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.
Examples 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 is created and
maintained by directing the company’s marketing activities toward creating and maintaining
successful exchanges with the customers (Hutt and Speh, 2013).
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 manufacturers’ demand for tires, 3 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 ina department
store 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
rice 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 (Llanes and Jurado, 1982):

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 a 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 in the firm normally influences buying
decisions.

TYPES OF BUYING SITUATION

1. Straight Rebuy – describes a situation where a firm reorder on a regular basis.
2. Modified Rebuy – describes a buying decision where a firm want to make some changes to
product specifications, process, delivery or payment requirements, and other terms.
3. System Purchase – involves a total solution to the buyer’s problem of not making separate
purchases and decisions.
4. New-Task 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 data 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.
Multiple Choice. Encircle the letter of the correct answer

1. Incudes decisions that persons make in choosing what product to buy, where to buy the
product, when to buy, how the products will be purchased and why the particular product
or brand was chosen.
a. consumer buying behavior
b. consumer product attitude
c. consumer product decision
d. consumer brand awareness

2. A person’s interpretation of the information around him that makes him form a meaningful
scenario
a. Learning
b. Perception
c. Motivation
d. Attitude

3. Refers to what stimulates a person to purchase a product or avail of a service

a. learning
b. perception
c. motivation
d. attitude

4. Involves changes in a person’s attitude due to his experience

a. learning
b. perception
c. motivation
d. attitude

5. Factors that cover those different areas that influence the market such as their motivation
level, beliefs, and way of looking at things or situations
a. psychological factors
b. social factors
c. personal factors
d. cultural factors

6. The first person that a sales representative gets in contact with; controls the flow of
business information into the buying center or firm.
a. advocates
b. buyers
c. gatekeeper
d. decision makers
7. People that influence buying center decisions; influence is obtained from their expertise on
a particular topic
a. advocates
b. buyers
c. gatekeepers
d. decision makers

8. His duty is to search for data that can be used during the purchasing process
a. advocates
b. buyers
c. gatekeeper
d. information seeker

9. The members of an organization who will use a product; they initiate the product purchase
and provide information as to specifications
a. advocates
b. buyers
c. gatekeeper
d. users

10. The person who chooses and approves the suppliers or providers of products
a. advocates
b. buyers
c. gatekeeper
d. decision makers

11. People who have the authority to contact suppliers and negotiate terms for products to be
ordered or purchased
a. advocates
b. buyers
c. gatekeeper
d. decision makers

12. Describes a situation where a firm reorder on a regular basis

a. straight rebuy
b. modified rebuy
c. system purchase
d. team buyer

13. Describes a buying decision where a firm wants to make some changes to product
specifications, process, delivery or payment requirements, and other terms
a. straight rebuy
b. modified rebuy
c. system purchase
d. team buyer
 14. Involves a total solution to the buyer’s problems, not making separate purchases and
decisions
a. straight rebuy
b. modified rebuy
c. system purchase
d. new-task buying

15. A bigger market in terms of quantity purchased

a. industrial market
b. government market
c. Consumer market
d. reseller market

Discussion Questions:
1. Enumerate the different factors that influence consumer buying behavior and explain each.
2. How does industrial market differ from consumer market?
3. Explain the role that each member of the family plays in the following:
a. Purchase of new appliance;
b. Choice of buying a new car;
c. Choice of place for family outing; and
d. Choice of restaurant.