ELECT 4:

ENTREPRENEUR
SHIP
Chapter 3: Consumer Behavior
WHAT IS CONSUMER?
Consumer
Consumers are people or organizations that purchase
products and services. They are humans or other
economic entities that use a good or service. Furthermore,
they do not sell on that item that they bought.
DIFFERENCE OF CONSUMER
AND CUSTOMER
Consumer
The consumer is the one who consumes/uses the goods
or services.
Customer refers to a person who buys the goods or
commodity and pays the price for it.
WHAT IS CONSUMER
BEHAVIOR?
Consumer Behavior
Consumer behavior is the study of how individual
customers, groups or organizations select, buy, use, and
dispose ideas, goods, and services to satisfy their needs
and wants. It refers to the actions of the consumers in the
marketplace and the underlying motives for those actions.
 INTERPERSONAL
DETERMINANTS OF CONSUMER
BEHAVIOR
Cultural Influences
Cultural Influences

• Culture – can be defined as the values, beliefs,

preferences, and tastes handed down from one
generation to the next.

• Culture is the broadest environmental determinant of

consumer behavior. Entrepreneurs need to understand
their role in consumer decision making. They must
also monitor trends in cultural values as well as
recognize changes in these values.
Cultural Influences

• Subculture - A society is composed of several sub-

cultures in which people can identify. Subcultures are
groups with own distinct modes of behavior.

• Subcultures are the nationalities, religions, ethnic

groups, age groups, gender of the individual, etc.
Social Influences
Social Influences

• Social Class - Social classes are relatively

homogeneous and enduring divisions in a society.
They are hierarchically ordered and their members
share similar values, interests, and behavior.

• We often assume three general categories among social classes :

lower class, middle class and upper class (In Philippines).
• Upper-upper, lower-upper, upper-middle, and lower-middle class,
followed by the working class and lower class.( In United States)
Social Influences

• Groups that have a direct influence on a person are called

membership groups.

• Some primary membership groups are family, friends,

neighbors, and co-workers, with whom individuals interact
fairly continuously and informally.
• Secondary groups, such as professional and trade-union
groups, tend to be more formal and require less continuous
interaction.
Social Influences

• People are also influenced by groups to which they do

not belong. Aspirational groups are those the person
hopes to join; dissociative groups are those whose
values or behavior an individual rejects.
Social Influences

• Reference groups consist of people or institutions whose

opinions are valued and to whom a person looks for
guidance in his or her own behavior, values and conduct.

• Children especially vulnerable to the influence of reference

groups. They often base their buying decisions on outside
forces such as what they see on television and internet or
the opinion of friends.
Social Influences

Within a reference group that influence the consumer buying

behavior, several roles have been identified:

• The initiator: the person who suggests buying a product or

service.

• The influencer: the person whose point of view or advice

will influence the buying decision. It may be a person
outside the group (singer, athlete, actor, etc..) but on which
group members rely on.
Social Influences

• The decision-maker: the person who will choose which

product to buy. In general, it’s the consumer but in some
cases it may be another person.

• The buyer: the person who will buy the product. Generally,
this will be the final consumer.
Social Influences

• Social Roles and Statuses- The position of an individual

within his family, his work, his country club, his group of
friends, etc.. – All this can be defined in terms of role and
social status.

• A social role is a set of attitudes and activities that an

individual is supposed to have and do according to his
profession and his position at work, his position in the
family, his gender, etc.. – and expectations of the people
around him.
Family Influences
Family Influences

• Family - The family is maybe the most influencing factor

for an individual. It forms an environment of socialization
in which an individual will evolve, shape his personality,
acquire values. But also develop attitudes and opinions on
various subjects such as politics, religion, society, social
relations or himself and his desires.
Family Influences

• To target a market for their goods and services,

entrepreneurs and marketers find it (family) useful to
describe the role of each spouse in a household in terms of
the following four categories:

 Autonomic role is seen when the partner independently

make equal numbers of decisions.
Family Influences

 Husband-dominant role occurs when the husband usually

makes certain purchase decisions.

 Wife-dominant role has the wife making certain buying

decisions.

 Syncratic role refers to joint decisions.

Personal Influences
Personal Influences

• Age and Way of Life - Consumer buy different goods and

services over a lifetime. A consumer does not buy the
same products or services at 20 or 70 years. His lifestyle,
values, environment, activities, hobbies and consumer
habits evolve throughout his life.
LIFE CYCLE CONSUMER BEHAVIOR
Personal Influences

• Occupation and Economic Situation - Occupation also

influences a person’s consumption pattern. Entrepreneurs
should identify the occupational groups that are more
interested in their products and services, and consider
specializing their products for certain occupations.
 STAGES OF THE
CONSUMER BUYING
DECISION PROCESS
The Stages of the Buying Decision
Process
Consumer buying decision process, includes fives stages:
 Problem recognition
 Information search
 Evaluation of alternatives
 Purchase decisions
 Post-purchase evaluation
The Stages of the Buying Decision
Process
Stage 1: Need / Problem Recognition
The buying process is triggered when consumers recognize
they have an unsatisfied need. This satisfied need can be
triggered by internal stimuli (such as feeling hunger or thirst)
or external stimuli (such as seeing an ad) that then becomes a
drive.
It is possible that a person has problem or need but is
unaware of it until entrepreneurs point it out.
The Stages of the Buying Decision
Process
An unsatisfied need arises when customers’ desired level of
satisfaction differs from their present level of satisfaction.
The Stages of the Buying Decision
Process
Types of Needs
When consumers go shopping to accomplish a specific task,
they are seeking to satisfy utilitarian needs.

When consumers go shopping for pleasure, they are seeking

to satisfy their hedonic needs – their needs for entertaining,
emotional, and recreational experiences.
The Stages of the Buying Decision
Process
Stage 2: Information Search
After recognizing the problem or need, the buyer will decide
whether or not to pursue satisfying that need. If the consumer
chooses to move forward, he or she will next search for
product information to help resolve the problem or satisfy the
need.
This is the buyer’s effort to search internal and external
business environments, in order to identify and evaluate
information sources related to the central buying decision.
The Stages of the Buying Decision
Process
Sources of information
Customers have two sources of information: internal and
external sources.

Internal sources are information in a customer’s memory, such

as names, images, and past experiences with different stores.

External sources consist of information provided by a host of

sources.
The Stages of the Buying Decision
Process
Stage 3: Evaluation of Alternatives
Individuals will evaluate different products or brands at this
stage on the basis of alternative product attributes-those
which have the ability to deliver the benefits the customer is
seeking. A factor that heavily influences this stage is the
customer’s attitude.
The Stages of the Buying Decision
Process
Stage 4: Purchase Decision
In the evaluation stage, the consumer forms preferences
among the brands in the choice set and may also form an
intention to buy the most preferred brand. However, two
factors can intervene between the purchase intention and the
purchase decision.
The Stages of the Buying Decision
Process
The first factor is the attitudes of others. The extent to which
another person’s attitude reduces one’s preferred alternative
depends on two things: (1) the intensity of the other person’s
negative attitude toward the consumer’s preferred alternative,
and (2) the consumer’s motivation to comply with the other
person’s wishes. The influence of others becomes even more
complex when several people close to the buyer hold
contradictory opinions and the buyer would like to please them
all.
The Stages of the Buying Decision
Process
The second factor is unanticipated situational factors that
may erupt to change the purchase intention.
The Stages of the Buying Decision
Process
Stage 5: Post-purchase Behavior
After purchasing the product, the consumer moves into the
final stage of the consumer buying process, in which he or she
will experience some level of satisfaction or dissatisfaction.
The Stages of the Buying Decision
Process
Cognitive Dissonance
Cognitive dissonances, or doubts in the buyer’s mind about
whether purchasing the product was the right decisions.
The Stages of the Buying Decision
Process
Post purchase Satisfaction
The satisfaction with a purchase is a function of the closeness
between the buyer’s expectations and the product’s perceived
performance. If performance falls short of expectations, the
customer is disappointed; if it meets expectations, the customer is
satisfied; if it exceeds expectations, the customer is delighted.
These feelings of satisfaction influence whether the customer buys
the product again and talks favorably or unfavorably about the
product to others.
END