Consumer Behavior: Influencing Factors

• Consumers' decisions are essentially their own when purchasing a product or service.
• Certain factors affect consumers' choices and decisions.
• The factors can be used to determine the different kinds of buying behavior,
• Buying roles can be determined.
• Consumer Behavior is the behavior that consumers exhibit in looking, purchasing, using, evaluating, and disposing of products and services that they expect to satisfy their needs.

Factors Influencing Consumer Behavior

• Cultural
• Social
• Personal
• Psychological

Culture

• Culture is the communal aggregation and convergence of a country's philosophy, beliefs, traditions, values, attitudes, aspirations, and practices which has historically evolved since its inception.
• Distinct beliefs, traditions, and practices of Filipinos include:
  • Hospitality
  • Bayanihan
  • Emphasis on closed family ties
  • Concern for "pakikisama” and “utang na loob"
  • Habits of “ningas kugon”, “mańana”, and “never on time"
  • The attitude of crab mentality

Social Factors

• Social factors include reference groups, the family, and roles and status.
• Reference groups serve as direct (face-to-face) or indirect points of comparison in forming a person's attitudes or behavior.
• Family members can strongly influence buyer behavior and influence the purchase of different products and services.
• A person's position, responsibility, and authority are significant determinants of power and right to make decisions.

Personal Factors

• Personal factors include age and life cycle, occupation, economic status, and lifestyle.
• Age is a very significant determinant of consumer buying behavior.
• People have different professions and livelihood and do a variety of activities related to their respective occupations.
• Product choice is greatly affected by one's economic status which consists of income, saving, assets, borrowing power, spending capability, and attitudes towards spending and saving.
• People essentially have different lifestyles - active, healthy, bohemian, nomadic, solo, and rural.

Age and Lifecycle Stages

• Bachelor Stage – Young, single, and independent
• Newly Married Couples – Young, no children, also known as DINKs (double income, no kids)
• Full Nest I – Families with children, with youngest child below six years
• Full Nest II – Families with children, youngest child six years or older
• Full Nest III – Families with dependent children
• Empty Nest I – Older married couples, no children living with them
• Empty Nest II – Older married couples, retired, and no children living with them
• Solitary Survivor I – Older, no family, and supporting self
• Solitary Survivor II – Older, no family, and retired

Psychological Factors

• Psychological factors include motivation, perception, learning, and beliefs and attitudes.
• A person has various needs at any given time, and a need is considered if it presses or drives the person to act.

Theories of Human Motivation

• Freud's Theory of Motivation: The real psychological forces shaping people's behavior are largely unconscious, with the individual repressing many desires while growing up and accepting social rules.
• Maslow's Theory of Motivation: Human needs are arranged in a hierarchy ranging from the most pressing to the least pressing, which includes psychological needs, safety needs, social needs, esteem needs, and self-actualization needs.
• Herzberg's Theory of Motivation: Frederick Herzberg developed the "two-factor theory," which distinguishes dissatisfiers from satisfiers.

Maslow's Hierarchy of Needs

• Physiological needs: air, water, food, shelter, sleep, clothing, reproduction
• Safety needs: personal security, employment, resources, health, property
• Love and belonging: friendship, intimacy, family, sense of connection
• Esteem: respect, self-esteem, status, recognition, strength, freedom
• Self-actualization: desire to become the most that one can be

Perception

• Selective attention means that marketers have to work hard to attract customer attention because people are more likely to notice stimuli related to a current need.
• Selective distortion describes the tendency of people to twist information into personal meanings due to past experiences, anticipated wants, and thwarted mode of thinking.
• People will forget much that they learn and will tend to retain information that they want to keep and throw away the rest, which is selective retention.
• People most likely remember the best features of a product or service.
• Learning describes changes in an individual's behavior arising from experience; it is a product of the interplay of impulses, motivation, stimuli, cues, responses, and reinforcements.
• A drive is defined as a strong internal stimulus that compels action and becomes a motive when directed towards a drive-reducing stimulus object. Cues are minor stimuli that determine when, where, and how the person responds.

Beliefs and Attitudes

• Any marketer should always be aware of how customers perceive and react to marketing stimuli before they make important choices on what products to buy or services to acquire.

The Consumer Market

• A market refers to "people" with needs and wants to be satisfied, with money to spend, and with the willingness to spend money.
• The demand characteristics of markets for any product or service are:
  • People with wants and needs
  • Income or purchasing power
  • Buying behavior

Types of Consumers

• Personal Consumer: Buys goods and services for his own use for household purposes, for family member, friend or any individual, and for any given purpose and are referred to as "end-users” or the “ultimate consumers”.
• Organizational Consumer: Consists of private businesses, government agencies, and institutions, all of which buy products, equipment, and services to run their respective organizations.

The Filipino Consumer

• One of the more significant factors that allows for easy identification of the Filipino consumer is culture.
  • When Filipino women wash clothes, they use detergent bars or powder in basins and make "kuskus" while listening to the radio in the morning.
  • Young Filipinos, especially women, have a unique product loyalty called “hiyang”. Once they are satisfied with a product, patronage can be assured.
  • Filipino women get carried away with advertisements to have physically strong, tall, and healthy children who are intelligent and gifted, so they readily buy milk and margarine brands that make such claims. Eating outside of homes creates a certain "status".
  • Filipinos generally love to wear good clothes, spend money on shoes, and go to salons and tend to prioritize good looks than the need to eat nutritious meals.
  • Filipinos give very great importance to education, some parents sell their carabaos and loan their jewelry and pieces of land to have money for tuition fees.

Roles of Consumers

• Initiator: The person who first thinks or suggests that a product or service be bought
• Influencer: The individual whose opinions and views have some bearing on a given purchase decision
• Decider: The person who eventually makes the decisions of what, where, when, how often, and how much to buy.
• Buyer: The individual who makes the actual purchase
• Users: The people who use or consume the product or service

Stages in the Buying Process

• Problem Recognition
• Information Search
• Evaluation of Alternatives
• Purchase Decision
• Purchase

Types of Buying Decision Behavior

• Routine Problem-Solving: Typical for low-priced and frequently purchased products.
• Limited Problem-Solving: Consumers seek some information or rely on a friend to help them evaluate alternatives.
• Extended Problem-Solving: Each of the five stages of the consumer's purchase decision process is undertaken, including time and effort on external information search and identification and evaluation of alternatives.

Strategies to Focus on Consumer Buying Behavior

• Companies should take into consideration the consumer's behavior toward new products.
• An effective research approach using surveys, experiments, observations, samplings and case studies, when applicable or necessary, should be adopted and the proper interpretations and reporting must be performed.
• Planning and preparing appropriate marketing strategies addressing consumer buying behavior should be prioritized to know more about consumer preferences.
• Prior to producing new products, companies should conduct a thorough research of consumer choices to avoid manufacturing a product that nobody has the desire to purchase.
• Seminars to educate and to inform consumers about new company goods or products are highly recommended so that consumers will be able to appreciate the more innovative and new features of these products.
• Promotion and advertising can influence consumer behavior; using these strategies may be helpful in uplifting company gross sales.