Consumer Buying Behavior PDF

Consumer buying behavior Consumer Market The consumer market consists of individuals and households that purchase goods and services for personal use. Unlike the business market, where transactions are made between businesses, the consumer market is driven by emotional, social, and...

Consumer buying behavior Consumer Market The consumer market consists of individuals and households that purchase goods and services for personal use. Unlike the business market, where transactions are made between businesses, the consumer market is driven by emotional, social, and cultural factors. Types of Consumer Buying Behavior Complex Buying Behavior - Consumers engage in complex buying behavior when the purchase is expensive, infrequent, and risky. For instance, buying a house or a car involves a lot of research and decision-making. Dissonance-Reducing Buying Behavior: When consumers are highly involved in a purchase but see little difference between brands, they are likely to experience post-purchase dissonance (buyer’s remorse). This behavior is typical for durable goods like furniture or appliances. Habitual Buying Behavior: When involvement is low, and differences between brands are minimal, consumers tend to buy out of habit rather than brand loyalty. ◦Example: In the Philippines, consumers often buy daily essentials like rice and detergent based on availability and price, rather than brand preference. Variety-Seeking Buying Behavior: Consumers with low involvement but significant perceived brand differences may switch brands for the sake of variety. ◦Example: Snack foods, where consumers may switch from one brand of chips to another just Consumer Market Segmentation Geographic Segmentation: Divides the market based on geography. For instance, companies often develop distinct marketing strategies for urban and rural areas. ◦Example: In the Philippines, urban areas like Metro Manila see a higher demand for luxury goods, while rural areas are more inclined towards basic needs. Demographic Segmentation: Segmentation based on factors like age, income, gender, education, and occupation. ◦Philippine Example: Fast-food chains like Psychographic Segmentation: This segmentation divides consumers based on lifestyle, social class, or personality traits. ◦International Example: Starbucks segments its market by lifestyle, focusing on middle- to upper- class consumers who prioritize experience and convenience. Behavioral Segmentation: Focuses on consumer knowledge, attitudes, and responses to a product. ◦Philippine Example: Globe Telecom uses behavioral segmentation for its data plans, targeting heavy users of social media platforms like Facebook and TikTok. Consumer Decision-making process Problem Recognition: The consumer identifies a need. Information Search: The consumer seeks information about how to satisfy the need. Evaluation of Alternatives: The consumer compares different products or brands. Purchase Decision: The consumer selects a product based on the evaluation. Post-Purchase Behavior: The consumer reflects on the purchase decision, which can result in satisfaction or dissatisfaction. Philippine Context: Due to the importance of family, many Filipino consumers consult their family members at various stages of the decision-making process, especially for significant purchases like electronics or home appliances. Marketing Mix: Product Product – core element of marketing mix - what a company offers to satisfy customer needs and wants - also include services, experiences, or ideas - tangible/intangible Classification of Products Consumer products Convenience products - ◦These are products that consumers buy frequently, immediately, and with minimal effort. ◦Example: In the Philippines, products like soft drinks, snacks (such as chips or street food), and everyday necessities (e.g., toothpaste like Colgate or shampoo like Sunsilk) are examples of convenience products. Shopping products ◦These products are purchased less frequently, and consumers often compare these based on price, quality, and style. ◦Example: In the Philippines, electronics (like mobile phones from brands like Samsung or Xiaomi) and fashion items (e.g., clothing from Bench) are shopping products. Specialty products ◦These are unique products or brands for which a significant group of buyers is willing to make a special purchasing effort. ◦Example: In the Philippines, luxury cars like BMW or designer bags (Louis Vuitton) fall under specialty products. ◦International context: Globally recognized luxury brands like Rolex watches or Rolls-Royce cars are prime examples of specialty products. Unsought Products ◦These are products that the consumer does not know about or normally doesn't think of buying. They often require more aggressive marketing. ◦Example: Life insurance or funeral services, which are not actively sought but are necessary. ◦International context: Globally, products like insurance policies or emergency roadside services (such as AAA) fall under this category. Industrial Products Materials and Parts: ◦Raw materials and components used in the production of other goods. ◦Example: In the Philippines, companies like San Miguel Corporation buy agricultural products for food manufacturing. ◦International context: Car manufacturers like Toyota purchase materials like steel and electronic parts for production. Capital Items: ◦Industrial products that aid in the buyer's production or operations. ◦Example: Machinery purchased by a Philippine construction Supplies and Services: ◦Operating supplies (e.g., lubricants, coal, paper) and services (e.g., cleaning, repair) used in the daily operations of a business. ◦Example: Office supplies for businesses in Makati or Cebu. ◦International context: Global giants like Microsoft also depend on office supplies and services for daily operations. CONVENIENCE –toothpaste, snacks, coffee SHOPPING PRODUCTS – clothing, electronics, shoes SPECIALTY – luxury cars, designer clothes,wedding ring  UNSOUGHT PRODUCTS – insurance, catering services, hospital bills MATERIALS AND PARTS – Wood, Steel, Macginery parts CAPITAL ITEMS –Big machines, Buildings, Tractor SUPPLIES AND SERVICES – Bond paper, haircut, Branding Branding involves creating a unique identity for a product that differentiates it from competitors. A brand represents a company's promise to deliver a specific set of features, benefits, and services to the customer. International Branding Brands such as Apple, Nike, and Starbucks have established a global presence by creating consistent, strong identities that resonate across cultures. These brands are instantly recognizable due to their logos, taglines, and product quality Apple  Apple is known for innovation and premium quality. Nike represents performance and sports excellence. Starbucks is synonymous with premium coffee culture. Branding in the Philippine Context In the Philippines, homegrown brands like Jollibee, Bench, and San Miguel have created strong emotional connections with consumers by leveraging Filipino culture and values. For instance: Jollibee is not only recognized for its unique menu but also for embodying the essence of family and community, which are integral to Filipino culture. Bench focuses on local fashion trends, making it accessible and relatable to the Filipino market. San Miguel has positioned itself as a brand that represents national pride, from beer to food products. Packaging and Labeling Packaging and labeling play vital roles in marketing a product. They are not just about protection but also about communication and branding. Packag ing Packaging refers to the design and production Protects the of containers or product wrappers for products. Promotes the It is essential because it: product Facilitates convenience Labeling Labeling provides information about the product, such as ingredients, usage instructions, and expiration dates. It is also a critical aspect of regulatory compliance. International context Many countries have strict labeling regulations, especially for food and pharmaceutical products. Labels must clearly state nutritional information, allergens, and safety warnings. For instance, the European Union mandates extensive labeling for genetically modified ingredients. Philippine context The Food and Drug Administration (FDA) of the Philippines requires detailed labeling on food and health products, ensuring that consumers are informed about the nutritional content and safety of what they purchase. Price Amount customers are willing to pay for a product or service Value of product  Internal Factor in Setting Prices Cost of Production Unilever calculates the production cost The total cost of manufacturing a of its products to ensure prices cover expenses and generate profit. product or delivering a service Marketing Objectives achieve through its pricing Apple uses premium pricing to position strategy, such as market its products as high-end and penetration, revenue innovative. maximization, or market skimming. Companies in strong financial positions may adopt competitive or penetration Company’s Financial Position pricing to capture market share, while The company's overall financial those in financial difficulty might focus on cost-plus pricing to ensure  External Factors Market Demand High Demand=higher price The level of consumer demand for a product Low demand=lower price or service. Companies price is based on Competitive pricing competitors price set by competitors for similar products or services San Miguel – International beer brands Economic Conditions Economic recession – price Inflation rates, economic downturns & overall sensitive economic health Price controls, taxes, tariffs Regulatory Environment Affects price Pricing Policies Cost Plus Pricing. Competitive pricing Value-based pricing Penetration Skimming Psychological Pricing Pricing Strategies Dynamic Pricing Bundle Pricing Promotional Pricing Geographical Pricing Cost-Plus Pricing