CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

Foreign Literature
Consumer behavior has emerged as a significant area of interest in market research throughout the 21st
century. Extensive studies have predominantly concentrated on investigating consumer behavior and
attitudes towards various brands, offers, sellers, and business strategies (Mokrysz, 2016).
Several research shows, consumer behavior is influenced by subjects such as lifestyle (Adnan et al.,
2017), cultural differences and the place of residence (Zhong et al., 2018), opinion and experience of
those around them (Jain et al., 2018), individual’s hobbies and free-time activities (Silveira etal., 2018),
emotions, experiences and other psychological motives, external factors (Kemp et al., 2018) and many
more. Consumer decision-making process is complex and complicated as during it the individuals are
affected by intrinsic and extrinsic factors (Nash, 2018)
According to Tjiptono (2008), the primary motive behind understanding consumer buying behavior is to
achieve customer satisfaction and meet business objectives. Developing and managing customer
relationships rely on providing value and ensuring customer satisfaction (Kotler, 2012). When consumers
are satisfied with the value they receive from goods or services, they are more likely to become long-
term customers, consistently making purchases at the same venue. Schiffman and Kanuk (2010) define a
decision as the act of selecting among multiple alternatives. Purchasing decisions are influenced by
various factors, including product type, quality, design, pricing, service, promotion, motivation, and
more. This emphasizes the importance for businesses to excel in their product offerings, stay updated
with market trends, and understand the factors influencing consumer purchase decisions.

Local Literature
Marketing has played a significant role in introducing various products and services worldwide. Different
countries have focused on promoting their unique selling propositions. The consumer behavior of
Americans, Europeans, and Asians has become global benchmarks in terms of buying habits and
lifestyle. However, Filipino consumers have developed distinct buying habits that are deeply ingrained in
their culture. Filipinos generally have a preference for purchasing items on sale or with discounts, which
has become a common characteristic among Filipinos globally. Their buying routines have become a way
of life, and they possess a keen knowledge of the products and services available in the market.

The Filipino buying behavior is influenced by various factors, including family, friends, relatives, and
colleagues. Over time, their buying behavior has been shaped by the modern philosophies influenced by
Asians, Americans, Europeans, and others. In certain cases, product knowledge and testing play a role in
the decision-making process.

Shopping has become an integral part of the daily lives of typical Filipinos, as they actively seek out
goods to try. The Philippines boasts numerous malls that cater to almost every need, making it a
convenient "one-stop shop" as described by many buyers. Shopping is not only a transactional activity
but also an opportunity for Filipinos to showcase their strong emphasis on bonding and social ties, which
is a unique aspect of Philippine culture. In fact, the country takes pride in having three of the largest
malls globally. With the presence of these large malls, shopping has become a convenient and enjoyable
part of Filipinos' daily routine, allowing them to purchase their favorite products and services.
Foreign Studies
Lifestyle
Lifestyle is the lifestyle of a person in theworld who expressed in activities, interests, and opinion.
Lifestyle also reflects the consumption pattern of how he uses time and money is not permanent, rapidly
changing adapted to change his life. Changes in lifestyle will change the consumption patterns of a
person. Indicators used to measure lifestyle are (1) activity, (2) interest, and (3) opinion.
Products Quality
Product quality are all factors that present in a product that causes the product has valued according to
the purpose for what the product was produced and give better results than expected and capable of
satisfying the needs are better expressed or implied. Indicators used to measure the quality of the
product are: (1) The draft model of the product in accordance with market trends, (2) comfortability, (3)
material used, (4) style, and (5) unique characteristics
Price
Price is the amount of money charged for a product or service. Throughout its history, the price has
become a major factor affecting the choice of the buyer. Indicators used to measure the price of the
products are: (1) Prices are in line with the quality of the product, (2) Affordability prices, (3) Comparison
of the price of other products.
Purchase motivation
Motivation can be described as the impetus of the individual person and force him to do, and this
motivation generated by the pressure arising from the needs that does not met. Indicators used to
measure the purchasing motivations are: (1) a strategic business location, (2) price, (3) services offered,
(5) an interesting shop, (6) the ability of the salesman.
Purchase Decision
Purchasing decisions are individual activities that are directly involved in the decision to make the
purchase of the products offered by the seller. The indicators used for the purchase decision variables
are: (1) introduction of requirements, (2) search for information, (3) evaluation of alternatives, (4) the
decision of purchase, (5) conduct post-purchase.
By exploring these factors, we aim to gain a comprehensive understanding of the complex dynamics that
shape consumer behavior and purchase decisions. This research will contribute valuable insights for
businesses and marketers seeking to develop effective strategies to engage with consumers in a rapidly
evolving marketplace.
Local Studies
These factors collectively shape the behavior and decisions of Filipino consumers in the marketplace,
playing a fundamental role in influencing their consumer behavior and purchase decisions :
• Online Shopping
According to a study conducted by Euromonitor in 2016, the rise of e-commerce in the Philippines was
driven by the increasing reliance of Filipinos on their smartphones. Leading online shopping platforms
like Zalora and Lazada launched mobile applications during the review period, which gained significant
popularity among users for browsing catalogs and making purchases. In addition to traditional payment
options such as Globe G-Cash and Smart Money, Smart e-Money Inc collaborated with Citi Philippines
and Visa to introduce Charge2Phone, a pioneering sticker-based contactless payment solution. This
innovation allows mobile phones to function as credit cards or wallets, promoting cashless transactions
through the internet.
The substantial growth of internet retailing in the Philippines can be attributed to retailers' ongoing
efforts to enhance their businesses. They achieved this by offering a wider range of product options to
cater to diverse customer preferences. Furthermore, retailers expanded their reach beyond Metro
Manila to serve customers in other areas of the country. Recurring promotional strategies, such as
providing discounts or markdowns, were also implemented to attract and retain customers. These
initiatives played a vital role in driving the significant growth of internet retailing in the country.
• Social Influence
Social influence plays a significant role in shaping consumer behavior, encompassing factors such as
family dynamics, societal norms, and interpersonal relationships. Behavioral scientists have increasingly
recognized the profound impact of the social environment and personal interactions on human
behavior. In the realm of consumer behavior, cultural norms, social class distinctions, and the influence
of reference groups have been closely linked to purchasing decisions and consumption patterns. Culture,
in particular, exerts a fundamental influence on an individual's needs, desires, and actions, as every
aspect of life is conducted within the context of the society in which one resides. When examining
Filipino consumers, their social class positioning—whether upper, middle, or lower—is readily
identifiable, further illustrating the significance of social influence in their consumer choices.
• Review and Feedbacks
Consumer reviews and feedback play a significant role in influencing purchasing decisions. Consumers
often rely on online customer reviews to gather information and make informed choices (McEleny,
2008; as cited in Caceres et al., 2018). However, it is important to note that the impact of reviews on
consumers' buying decisions may vary. Not all reviews have the same effect on consumers, as stated by
Dong, Li, and Sivakumar. Positive or negative reviews can sway a consumer's decision, but the influence
may differ for each individual.
In particular, reviews shared on social networks tend to enhance the trustworthiness of a product or
service among buyers. Such reviews carry more weight and credibility. However, there are still
consumers who remain skeptical and prefer to physically assess products, especially electronic items,
instead of solely relying on online reviews. This indicates that some individuals may question the
reliability of online thoughts and seek hands-on experiences before making a purchase decision.
• Brand
Consumers rely on the opinions and recommendations of fellow consumers to assess the credibility of a
brand (Chakraborty, 2019). According to a study conducted by Waggener Edstrom Communications Ltd.
(WECL), 40% of Filipino respondents have a high likelihood of following a brand on social media due to
the discounts and promotions offered. Additionally, Filipino customers pay close attention to a
company's commitment to social and environmental responsibility. The 2015 Nielsen Worldwide
Corporate Sustainability Report indicates that Filipinos have a strong inclination towards purchasing
socially responsible brands, making it a significant factor in their buying decisions.
• Advertisement
Advertisements play a crucial role in consumer buying decisions. According to the Nielsen Global
Corporate Sustainability Report (2015), 43 percent of respondents in the Philippines find television
advertisements that highlight a company's commitment to positive social and environmental impacts
persuasive when making purchase decisions. Additionally, the way unfamiliar products are presented in
attractive ways can influence customers' perception of their quality (Brunner-Sperdin, Schnurr, and
Stokburger-Sauer, 2018). Marketers often leverage celebrity endorsements to increase brand awareness
and positively influence customers' inclination to support the brand or product.
Citations
Victor, V., Joy Thoppan, J., Jeyakumar Nathan, R., & Farkas Maria, F. (2018). Factors influencing
consumer behavior and prospective purchase decisions in a dynamic pricing environment—An
exploratory factor analysis approach. Social Sciences, 7(9), 153.
Davidaviciene, V., Meidute-Kavaliauskiene, S., & Paliulis, R. (2019). Research on the influence of social
media on generation Y consumer purchase decisions.
Herawati, H., Prajanti, S. D. W., & Kardoyo, K. (2019). Predicted purchasing decisions from lifestyle,
product quality and price through purchase motivation. Journal of Economic Education, 8(1), 1-11.
Castillo Jr, F. G. (2018). Consumer buying behavior: The multicultural influence in the Philippines. The
International Journal of Business Management and Technology, 2(2), 71-75.