CHAP 1: INTRODUCTION TO THE

STUDY OF CONSUMER BEHAVIOR

Consumer Behavior- refers to the study of

how individuals, groups, or organizations
select, buy, use, and dispose of goods,
services, ideas, or experiences to satisfy
their needs and wants. It involves
understanding the decision making process
of consumers, both individually and in The Term Consumer Behavior is
groups, and the factors that influence their synonymously related to the following
decisions. jargons:

customer consumer ●​ Individual Buyer Behavior

●​ End-User Behavior
classificatio purchaser end-user ●​ Consumer Buying Behavior
n
3 Elements
trading/resel May be in No. It is
ling the simply for 1.​ Knowledge The mental processes
business of personal related to thinking, understanding,
selling consumptio and interpreting information. It
similar n. includes how consumers perceive,
products; learn, remember, and make
therefore, decisions about products and
he can
services.
purchase it
wholesale 2.​ Affect the “feelings” or “emotions”
for the part. It includes the favorable or
purpose of unfavorable feelings and
retail selling corresponding emotions towards a
stimulus (e.g. towards a product or
purchasing yes Yes - if he
service offering or a brand.)
bought it for
personal 3.​ Behavior Behavior refers to the
use. actions taken by the consumer, such
as the actual purchasing decision,
purpose Reselling, Consumptio product usage, or how they engage
Gifting, or n with a brand. It is the outcome of the
Consumptio
interaction between knowledge and
n
affect and reflects the consumer’s
persona Individual or Individual or response to a product or service.
Organizatio Group of
n People
What is Consumer Interest and -​ Studying consumer behavior helps
Consumer Behavior? identify unfulfilled needs and wants
Consumer interest - refers to the level of of the buying public. A good
curiosity or desire that consumers have Business can tap into these groups
towards a product or service. and use it as opportunities to offer
Consumer Behavior - is the process which something that would entice the
deals with the various stages an individual crowd.
goes through prior to the acquisition of Selecting Target Market
certain goods and/or services. -​ Periodic re-assessment of market
opportunities time and again helps in
Following basis identifying certain consumer
a. What to buy? segments with very distinct and
b. When to buy? unique wants and needs. Observing
c. Where to buy? how these groups behave and how
d. How to buy? they make purchase decisions may
e. How much to spend? help marketers in designing products
Scope and Application of Consumer and services that are tailored-fit for
Behavior these specific groups.
Before deciding, a consumer should Marketing-Mix Decisions
answer: The marketer has to further determine the
What? Why? When? Where? right marketing mix for their respective
business to earn and benefit as well. The
People normally purchase goods due to Factor of marketing mix decisions are also
following reasons: known as the four Ps of Marketing.
-There is a need -​ Promotion
-Future use -​ Place
-Sale -​ Product
-Social status -​ Price
-Gifting purposes Importance of studying Consumer
1. HUMAN NEEDS Behavior
-​ is something that you’ve got to have
2. HUMAN WANTS Product Policies-to earn and maintain trust
-​ A WANT is something you would like of customers you need to have this.
to have. Price policies-prices should be competitive
and regulated.
Consumer Behavior & Factors that Decision Concerning Channels
Influence Demand Distribution- must be wise in decision to
1.​ Income distribute channels.
2.​ climatic/seasonal condition Sales Promotion Decisions- sales
3.​ Price expectations motivates people to buy more “sales”
4.​ Tastes and preference of consumer Developing Marketing Opportunities-
developing new to satisfy the target market.
Applications of Consumer Behavior
Analyzing Market Opportunities
Swift Launch of New Products- innovation Social-Psychology- study of how
of new products and easily change gadgets individuals operate in groups/ groups and its
if new releases. effects on buying behavior.
Implementing the “Marketing Concept- Cultural- Anthropology- The influence of
analyze the needs of their market and make society and the individual: cultural and
decisions to deliver desired customer cross-cultural.
satisfaction.

Evolution of Consumer Behavior

Markets in Context
-​ A market is a channel that allows
buyers and sellers of a certain good
or service to interrelate in order to
facilitate an exchange. It is a focal
base for the distribution of
commodities for the community.
Types of market:
●​ Physical marketplace
●​ Virtual market/online
Types of Retail Stores:
•Department Stores
•Groceries and Supermarkets
•Warehouse Retailers
•Specially Stores
•Convenience Stores
•Discount Stores Mobile
• Retailer/Mobile Commerce
•Internet E-tailer
The Five Inter-Disciplinary Dimensions
of Consumer Behavior
●​ Economics
●​ Psychology
●​ Sociology
●​ Socio-Psychology
●​ Cultural Anthropology

Economics- household management

Psychology- study of individual
determinants in buying behavior.
Sociology- the study of group dynamics in
buying behavior.
 Example: Designer wedding dress by a
CHAPTER 2: Marketing Segmentation famous couturier (with exact measurements
of the individual - as opposed to sizes small,
Market Segmentation is a marketing medium, large)
approach that involves segregating a wide-
ranging target market into subsections of Market Strategy & Market Segmentation
patrons (shoppers and users) who have ● Market segmentation and the
mutual needs and common characteristics, classification of target markets are notable
thereby constructing and executing components of every single marketing
approaches to be directed at their strategy. They serve as the basis for
requirements and yearnings by means of defining any specific marketing mix. Most
media channels and other touch-points that people are familiar with the 4Ps of
best allow to reach the consumers marketing strategies. It consists of:
● Product ● Price ● Place ● Promotion
FOUR TYPES OF MARKETING additional 3Ps . The added 3Ps include:
SEGMENTATION ● People ● Processes ● Physical Evidence
Segment Marketing
● Obliging the needs of a specific group; 8 ATTRIBUTES of EFFECTIVE
distinctive marketing mix for distinct SEGMENTATION
segments.
Example: Identifiable-The distinguishing features and
● Offering vegetarian recipes for the health characteristics of the segments must be
conscious and those who avoid meat in recognized and acknowledged.
their diet. Sizeable-The segments should be
Niche Marketing satisfactorily large enough to rationalize and
● Marketing to a solitary group, modifying validate the resources needed to target
the mix to their definite needs and entice them.
them, permitting the firm to participate in Unique needs- To warrant separate
relationship marketing. offerings, the sectors must respond to take
Example: Diet Coke and Sugar-free action to the unusual marketing mixes.
pastries for diabetics and health conscious Measurable-The prospective of the
consumers. segments in addition to the upshot of a
Differentiated Marketing certain marketing mix should be definite and
● Establishments retail compound varieties significant.
of a product; apiece alluring to atypical Accessible-The segments must be
market segment. Differentiated strategies available via communication and distribution
can generate better sales. channels.
Example: Profitable- Market segments must yield
● Coke in can ● Coke 500ml. ● Coke 1.5L profit or financial gain for it to be feasible.
Individual Marketing Durable-The segments should be fairly
● Tailoring market mix to suit individual stable, withstanding pressure, as it implies a
customers and create value for each capacity to continue and to reduce the cost
individual of repeated modifications.
Compatible-Segments must be One group must have customers who
well-matched and attuned with the firm's purchase a particular product for similar
resources and capabilities. purposes.
SEGMENTATION-S-T-P APPROACH
BASIC STEPS IN MARKETING ● Use demand variables such as consumer
STRATEGY: wants and needs, usage
Market segmentation situation,benefits,problem-solution desired,
1.​ Identification of customers needs others.
and market segmentation ● Describe segments using variables that
2.​ Develop profiles of resulting market help the firm in targeting requirements.
segments. Consider.
Identification of target markets demographics and shopping patterns.
3.​ Evaluation of attractivity of each ● Evaluate attractiveness of each segment
segment. such as potential growth rate and logistics
4.​ Selection of target market. costs.
Positioning ● Opt for one (or more) segment for
5.​ Identification of differential targeting.
advantages in each segment. ● Ascertain and execute position for firm's
6.​ Development and selection of offer.
positioning concepts.
Marketing planning THE FULL MARKET SEGMENTATION
7.​ Development of a marketing mix for PROCESS
each segment according to the ● Define the market
chosen position. ● Create market segments
Segmentation, Targeting and Positioning ● Evaluate segments on a set criteria
SEGMENTATION-Defining ● Construct segment profiles
● Consider the basis on which to segment ● Evaluate segment attractiveness
the market. ● Select target market(s)
● Look at the profile of the people & how ● Develop positioning strategy
they break into groups. ● Develop and Implement marketing mix
● Confirm the groups with valid segments. ● Review performance
TARGETING-Selecting FACTORS INFLUENCING MARKET
● Decide on target strategy SEGMENTATION
● Decide which segment to be targeted and ● Better marketing performance
why. ● Better services to customers (customer
POSITIONING-Attacking service).
● Customer perception ● Appropriate price fixation
● Position in minds ● Designing the products
● Marketing Mix ● Helps identify less satisfied segments and
Segmentation is the process of breaking concentrate on them.
down a diverse market of people into REASONS FOR MARKETING
distinct homogeneous group of buyers. SEGMENTATION
● Simplifies proper choice of target
marketing.
● Higher profits -Also, involves preferences, hobbies, and
●Expediates tapping of the market,adapting values to identify common patterns and
the offer to the intended parties. behaviors.
● Stimulates Innovation Here's an example of psychographic
● More efficient and economic marketing segmentation for ice skating equipment:
efforts. 1. Interests: Grouping consumers based on
● Consumer benefits their interest in ice skating, such as
● Superior market shares competitive ice skating, figure skating, or
recreational ice skating.
BASIS FOR SEGMENTATION 2. Opinions: Grouping consumers based
Segment Bounding - Is the manner by on their opinions on quality and durability,
which marketers make a distinction among such as their preference for certain brands
consumers and market segments. or materials.
GEOGRAPHIC SEGMENTATION 3. Lifestyle: Grouping consumers based on
- A marketing strategy used to target their lifestyle, such as their frequency of ice
products or services at people who live in, skating, or their willingness to invest in
or shop at, a particular location. high-end equipment.
Geographic segmentation several 4. Values: Grouping consumers based on
subcategories, their values, such as comfort, safety, or
including: versatility.
→ REGION PSYCHOLOGICAL INFLUENCE
•Continent •Country •State •District •City - Psychological influence refers to the ways
→ POPULATION DENSITY in which an individual's thoughts, emotions,
•Urban •Sub-Urban-areas just beyond a beliefs,
city's border •Rural or behaviors can be shaped or changed by
→ CLIMATE CONDITION the behaviors, attitudes, or actions of
•Weather others. This can occur through a variety of
Example mechanisms, such as persuasion,
- For example, a company that sells outdoor manipulation, imitation, or social conformity.
clothing and gear may use geographical Psychological influence can also be referred
segmentation to target marketing efforts to as social influence or
towards customers in colder climates. compliance.
DEMOGRAPHIC SEGMENTATION •Risk and Involvement: Refers to how
- Is a market segmentation technique where much a consumer psychologically invests in
an organization's target market is a purchase, and how much risk or
segmented based on demographic uncertainty is involved.
variables such [Link]: Employment, •Personality and Self-Image: Refers to
Age & Gender, Race & Ethnicity, Education, how a consumer's personality and sense of
Social Class & Income, Family Structure. self influence their purchasing decisions.
PSYCHOGRAPHIC SEGMENTATION •Attitude and Beliefs: Refers to how a
-This type of segmentation is often used in consumer's attitudes and beliefs towards a
addition demographic segmentation and product or brand can influence their
behavioral segmentation to gain a more purchasing decisions
holistic understanding of consumers habit
SOCIAL INFLUENCE 2. Response to Marketing & Communication
- Social influence represents another 3. Price & Product Acceptance
important set of influences on consumer Example:
behavior. Specifically, these are the effects Researching different brands and models,
of people and groups influencing one comparing prices, and reading reviews to
another through culture and subculture, understand the features and performance
social class, reference groups, and family. of options. et. (Recognizing the need for a
Example: new laptop, researching and comparing
- Suppose you are looking to buy a new different options and based on budget.)
phone. You start researching online and
notice that many of your friends and peers CONSUMPTION BEHAVIOR
are using a specific brand of phone. This - Consumption behavior refers to the
influences you to consider buying the same actions and decisions that individuals and
phone as your friends because you value firms make as they buy, use, and dispose of
their opinions and they are part of your goods and services. This can include
reference group. purchasing decisions, usage patterns,
1. Culture: Culture refers to the values, loyalty to certain products or brands, and
beliefs, and norms that are shared by a perceptions of satisfaction or dissatisfaction
particular group of people. in products.
2. Subculture: A subculture is a group of 1. Usage rate 2. Loyalty 3. Satisfaction
people within a larger culture that has its Example:
own distinct set of values, beliefs, and This entire process of purchasing, using,
norms. and continuing to use the phone over
3. Social Class: Social class refers to the time,expressing loyalty, and recommending
hierarchical system that ranks people based it to others is an example of consumption
on their financial status, occupation, and behavior.
education level.
4. Reference groups: A reference group is Basis for Segmentation
a group of people who an individual looks to Geographic
for guidance and support. For example, Demographic
members of the same family, friends, or Psychographic
people who they admire and look up to. Psychological Influence
These groups can have a significant impact Social Influence
on an individual's behavior and Marketplace behavior
decision-making. Consumption Behavior
5. Household: The household refers to the _______________
people who live in the same residence and AIO - Activity, Interest, and Opinions
who share common lifestyles. → Activity, Interests, and Opinions (AIO)
Survey is just one tool of measuring lifestyle
MARKETPLACE BEHAVIOR Buyer behavior segmentation can be a
- Marketplace behavior refers to aspects of powerful tool for understanding and
the purchase behavior of individuals and targeting different customer needs and
firms that leads to marketplace demand. needs within Buyer Behavior Parameters
1. Recognizing Needs •Benefit sought:
✓ Quality • Segment size: Refers to the number of
✓ Economy potential customers within a defined market
✓ Service segment.
✓ Look of the Product • Price sensitivity: Refers to how sensitive
•Brand Loyalty customers are to changes in price, and how
✓ Hard Core Loyal likely
✓ Split Loyal they are to try alternative products or brands
✓ Shifting if the price changes.
✓ Switches • Nature of competition: Refers to the level
•Usage Rate: of competition within a particular market,
✓ Heavy user including the number and size of
✓ Moderate user competitors, and the strengths and
✓ Light user weaknesses of each.
•Occasion • New entrants: Refers to the potential for
✓ Holidays and occasion new competitors to enter the market and
stimulated customers how this
•User Status may impact the existing players.
✓ Regular • Competitive differentiation: Refers the
✓ Potential ability of a company to differentiate itself
✓ First-time user from its competitors and offer unique value
✓ Irregular to customers.
✓ Occasional • Political issues: Refers to any political
•Attitude toward Offering factors, such as regulations or laws, that
✓ Enthusiastic may impact the marketing of a product or
✓ Positive Attitude service.
✓ Negative Attitude • Environmental issues: Refers to any
✓ Indifferent environmental factors, such as sustainability
✓ Hostile or carbon footprint, that may influence
•Readiness to buy customer perception and purchasing
Consumers' Impact on Marketing Strategy: decisions.
Building Bonds with Consumers
Relationship Marketing
➤ Transpires when a firm makes an effort VALUES, ATTITUDES, AND LIFESTYLES
to interrelate with their customers on a (VALS)
routine basis thereby granting them •a framework for psychographic
rationales to preserve a connection with the segmentation.
company over time.
Database Marketing PSYCHOGRAPHIC SEGMENTATION
➤ Includes strictly tracing consumers' • is a market research method used to
buying practices, allowing them to create divide a market or customer group into
products personalized specifically to the segments based on their beliefs, values,
needs and wants of their patrons based on lifestyle, social status, activities, interests
given information and opinions and other psychological
Evaluating Marketing Segment criteria.
INNOVATOR • Purchase Criteria
• Person who introduces new methods, Behavioral Characteristic- In industrial
ideas, or products. markets, patterns of purchase behavior can
THINKERS be a basis for segmentation. Behavioral
• People on your team who have a strategic characteristics may include:
or creative mindset. • Usage rate
BELIEVERS • Buying Status: Potential, First Time,
• Low-resource group of those who are Regular, Irregular, Occasional
motivated by ideals. • Purchase Procedure: Sealed Bids,
ACHIEVERS Negotiations
• The high-resource group of those who are • Multi- Level Segmentation
motivated by achievement.
STRIVES MULTI-LEVEL SEGMENTATION
• Low-resource group of those who are Definition: A market can be divided using a
motivated by achievements. series of criteria sequentially. Different
EXPERIENCERS metrics can be combined when segmenting
• high-resource group of those who are a market, provided they are relevant and
driven by self-expression. effective.
MAKERS Example 1:
• Low-resource group of those who are 1. The demographic base in the first
motivated by self-expression. instance, followed by;
SURVIVORS 2. The psychographic base and;
• The lowest income and with a median age 3. The buyer behavior/benefit base.
of 61, making them the oldest of all the Example 2:
segments. 1. Volume as the base in the first instance,
Segmentation In Industrial Market followed by
•a type of market segmentation that involves 2. The demographic/psychographic/buyer
dividing a market into different groups of behavior/benefit base.
industrial customers based on factors such Advantages of Multi-Level Segmentation
as their industry, size, location, and BETTER TARGET MARKET SELECTION
purchasing power. EFFECTIVE STRATEGY & MARKETING
Categorized as: MIX DEEP CUSTOMER INSIGHT TAILOR
PRODUCTS, PRICING, AND
LOCATION PROMOTIONS MODELS IN
•allows organizations to target consumers at SEGMENTATION
a granular, person level with online or offline Definition: There are two approaches of
messaging based on their physical location. models in segmentation: top-down
Company Type: Business customers can be approach and bottom-up approach
classified according to type. Top-down Approach
• Company size- Large Scale or Small Scale ● Start with the whole market, then divide
Industry into segments.
• Industry - Manufacturing, Service, Public Bottom-up Approach
Sector or Private Sector ● Also known as Database Marketing or
• Decision Making Unit Micro-Marketing
● Focuses on individual customers and ● Value to Customer
builds profiles ● Impact on Company Image
● Uses CRM software and databases for ● Distribution Channel Access
analysis ● Resources & Investment
● Employs techniques like Cluster Analysis ● Willingness to Invest
for detailed segmentation
● Ideal for fragmented markets ISSUES IN SEGMENTATION
● Enables "Segment of One Marketing" and Definition: Market segmentation, like any
mass customization project, comes with its challenges.
Addressing these issues is crucial for
Advantages of Market Segmentation effective product positioning, which
● Differentiates customer groups connects a product with its target market.
● Identifies the best target market Issues in Product Segmentation
● Increases market success ● COMPETITIVE POSITION
● Aids in capturing market share ○ Where will the new product compete and
● Clarifies customer needs how?
● Enables targeted marketing programs ● CUSTOMER NEEDS
● Specializes product, delivery, and pricing ○ Which specific needs does the product
● Improves marketing efficiency aim to satisfy?
● Identifies unsatisfied segments ● EXISTING ALTERNATIVES
● Benefits marketers and customers ○ Are there current products that fulfill the
● Boosts customer loyalty same needs?
Evaluation of the Segments ● MARKET GAPS
1. Is it sizeable? ○ Where is the real gap, and is the new
2. It is growing? offer needed in the market?
3. Is it profitable? ● COMPANY COMPETENCIES
4. Is it accessible? ○ What are the company’s strengths to
5. Is it compatible with the firm’s available compete effectively Issues in Brand
resources and capabilities? Segmentation
Attractiveness of a Market Segment ● COMPETING BRANDS
● Segment Size ○ Who are the main competitors in the
● Growth Rate market?
● Level of Competition ● COMPETITOR STRENGTHS
● Customer Brand Loyalty ○ What are the strengths of these
● Attainable Market Share competing brands?
● Required Market Share to Break Even ● CONSUMER PERCEPTION
● Sales Potential ○ How do consumers view and evaluate
● Expected Profit Margins these brands?
Determining Sales Potential ● PERFORMANCE EXPECTATIONS
● Buyer Intentions ○ What product attributes or functions
● Sales Force Estimate attract consumers?
● Test Marketing ● CONSUMER ATTENTION
● Statistical Demand Analysis ○ Are there large gaps between consumer
Evaluating Market Segment Suitability expectations and brand performance?
● MARKET POSITION Product Specialization Strategy
○ What is the most appealing market ➤ The firm specializes in a particular
position that’s still available? product and tailors it to different
● BRAND MERIT market segments.
○ Can the new brand meet the market’s Example: Gucci
needs and stand out? Market Specialization
➤ The firm specializes in serving a
The 4 C’s for Successful Segmentation particular market segment and offers that
1. Clarity segment an array of different products.
2. Consistency Example. Johnson & Johnson
3. Credibility Full Market Coverage
4. Competitiveness ➤ The firm attempts to serve the entire
market.
Consequences of Wrong Targeting Example: LG POSITIONING
Strategies What is Positioning?
● Erroneous Product Offers ➤ Positioning is the process by which
● Unseemly Marketing Appeals marketers attempt to generate an image or
● Incorrect Pricing identity in the minds of their target market.
● Overemphasis on Brand Name Just like targeting, successful positioning
TARGET MARKET STRATEGIES also embraces the same 4cs. These are:
Target is the real goal/objective that ● Clarity
marketers are aiming for. Market targeting ● Consistency
on the other hand [Link] the ● Credibility
segments to pursue ● Competitiveness
Target Market Strategies: The following list shows the typical
● Single-segment strategy price-quality relation.
● Selective specialization ● Low Price vs. High Price
● Product Specialization ● Basic Quality vs. High Quality
● Market Specialization ● Low Volume vs. High Volume
● Full Market Coverage ● Necessity vs. Luxury
Single-segment Strategy ● Light Vs. Heavy
(Concentrated Strategy) ● Unhealthy vs. Healthy
➤ Among the entire market only, a single ● Low-Tech vs. High Tec
market segment is served with one
marketing mix. This approach is usually the
strategy of choice for smaller companies
with limited resources.
Example: Ray Ban
Selective Specialization
➤ A multiple-segment strategy also known
as Differentiated Strategy
➤ Different marketing mixes are offered to
various segments.
Example: Facebook
CHAPTER IV : ROLES AND ISSUES IN Reminder to the Audience - it is designed
ADVERTISING to make people recall the brand in case they
have forgotten or to instill the brand's name
INTRODUCTION in the people's mind further.
Today, people are exposed to thousands of
ads daily, making it difficult for the audience Excite or Create a Need - advertising,
to fully engage with them. using graphical art, displays tempting,
HISTORY OF ADVERTISING exciting, and compelling contents that make
Advertising has its root from the latin word people crave for the product. Making them
“Advertere” meaning “turn around” and aware they need the product.
from the french word “advertir” which later Generate Awareness - it helps in making
developed to an english term “advert” to people aware of a brand in case it is new, or
become “advertise” in the late middle when it is not yet popular.
english. The history of advertising can be Increase the Reach - the wider the
traced to ancient civilizations. It became a coverage of an advertisement, the more
major force in capitalist economies in the people are reached out and thus, more
mid-19th century, based primarily on mileage and market penetration are created
newspapers and magazines. In the 20th
century, advertising grew rapidly with new TYPES OF ADVERTISING
technologies such as direct mail, radio, Advertising is a form of marketing
television, the internet, and mobile devices. communication used to promote or sell
something. Other than creating awareness
Father of Advertising- David Mackenzie about a product or brand. The different
Ogilvy types of advertising:
PRODUCT ADVERTISING
ROLE OF ADVERTISING IN BUSINESS Is any method of communication about the
promotion of a product in an attempt to
Advertising as a key marketing strategy. induce and encourage potential customers
to purchase the product. This being used to:
Advertising is a component of the • To launch new products
marketing process and it plays a vital role • Announce changes existing products
whether you are a beginner or running a • Increase Sales of those products
business for many [Link] is the part that is Styling
involved in communicating a business, a . This is a great consideration to many
product or a service. buyers as they go not just to what is
practical but also to what looks modern and
futuristic.
ROLES: Interior Design-Refinements in the cabin of
a car, just like the inside of a house or a
Brand Positioning - it helps in shaping or condo, draws much attention to any new car
improving the image and perception of buyer.
prospective customers about a product or a Engine Performance-This is a major
brand. consideration and would largely depend on
what and how the car will be used after PRINT ADVERTISING
purchase is made. For family use, a simple Print media is a form of advertising that
4x2 manually operated transmission would uses physically printed media like
suffice. magazines and newspapers to reach
Ride and Handling-How a car performs on prospective customers. Includes brochures
bumpy roads, mud-stricken scenarios and and flyers. Anything written in the print
sand is a major thing to consider. Even the media to grab the attention of the target
noise levels of the engine and steering have audience.
to be looked into in one's choice of a unit.
Extra Features-Units for sale now boast of OUTDOOR ADVERTISING
six-speakers for its entertainment, 6.5-inch Out-of-home Advertising the type that
touch screen system with Bluetooth, reaches consumers when they are outside
hands-free calls and GPS. . of their homes. Consider as mass-media
medium
CORPORATE ADVERTISING
Corporate advertising is a form of public •Billboard advertising
relations that aims to build credibility and •Point of sale displays
stability for a company. It improves the •Street furniture
public's image and boosts a company's •Transit advertising and wraps
goodwill. In the Philippines, corporate •Mobile billboards
advertising is a trend that emphasizes •Guerrilla advertising or ambient media
Corporate Social Responsibility (CSR)
programs, focusing on ethical and
environmental BROADCAST ADVERTISING
DIRECT RESPONSE ADVERTISING constitutes several branches to include
Promotional methods in which a prospective television, radio or the internet. The
customer is requested to respond directly commercials aired through these channels.
and immediately to the advertiser, through
the use of a "devise" provided in the Radio Advertisement or Ad
advertisement is called direct response aired several times before it actually sinks in
advertising the mind of customers.
• Coupon to cut and mail
• Business reply card Television or tv advertising
• Toll-free telephone number Usually considered the advertising for
• Hotspot to click corporate giants.
• Internet home page
FINANCIAL ADVERTISING COVERT ADVERTISING
Financial advertising can help a company Also known for advertising in movies. A
attract funds if there are plans for expansion particular or brand is incorporated in some
and other major investments. This type of entertainment and media channels like
advertising is intended for investors, loan, movies or teleserye.
banking, and mortgage consumers.
 James Twitchell in his book Living it Up: Our
CELEBRITY ADVERTISING Love Affair with Luxury noted that"
Celebrity endorsements and their popularity "Human beings did suddenly become
for endorsements of their brand or products materialistic. We have always been
desirous of things..
Pros
•It builds Credibility In an overview made with regards to
•It makes the brand stand out Philippine Advertising Regulations, it was
•It opens up new markets highlighted that in this country practitioners
in the field of advertising are aware of the
Cons great responsibility attached to their trade.
•Images and Reputation of Celebrities can
Change Overnight Official pronouncements include:
•The celebrity of choice may overshadow “All of us in the business of advertising have
the product of brand responsibility to our public, to our
•Endorsements are very expensive consumers, and to one another"

ROLE OF ADVERTISING IN THE To them, in very certain terms,

ECONOMY “Responsibility means advertising must
inspire public confidence, be legal, be
decent, be honest, and above all
TRUTHFUL
TRUTH IN ADVERTISING
Advertising has been accused of: The Philippine government is aware that
•Encouraging materialism and consumption, advertising wields an immense influence in
•Of stereotyping our contemporary society. Having stated
•Of causing consumers to purchase items that, Republic Act No. 7394 (Consumer
for which there really is no need Act of the Philippines) was enacted
•Of taking advantage of children primarily to protect the consumers against
•Of manipulating consumers' behavior for false, deceptive and misleading
using sex to sell, advertisements.
•Generally, contributing to the downfall of
our social system. Under Article 8 of the subject law, it states
"that the State shall protect the consumer
Vance Packard wrote and was quoted in from misleading advertisements and
Social Communication in Advertising: fraudulent sales promotion practices." To
"Large-scale efforts are being made, often this end,
with impressive success, to channel our
unthinking habits, our purchasing, Department of Trade and Industry (DTI)
decisions, and our thought processes by the has been tasked to enforce the provisions of
use of insights gleaned from psychiatry and this Act
social sciences."
The Department of Health (DOH) on the
other hand, is the agency that oversees the
products with respect to food, drugs,
cosmetics, devices and hazardous FALSE IN ADVERTISING
substances.
False Advertising
Article 110 of the same Act states "that it
shall be unlawful for any person to It refers to any published claim or
disseminate or to cause the dissemination advertising materials that gives customers
of any false, deceptive or misleading an incorrect understanding or belief about a
advertisement by Philippine mail or in product or service being offered. False
commerce by print, radio, television, advertising is deceptive and illegal, even if
outdoor advertisement, or other medium for the misleading advertising was made by
the purpose of inducing or which is likely to mistake.
induce directly or indirectly the purchase of
consumer products or services". Example
When the prospective buyers arrive and
PANA. also came up with a Code of Ethics mention the newspaper ad, they are told
which covers the following: that the company is no longer offering that
special deal, but the sales in-charge will
•Good advertising recognizes both its happily show them other units. This is called
economic and social responsibility the "Bait-and-Switch" tactic.
•Good advertising depends for its success Inconsistent Comparison
on public confidence This takes place when an advertisement
•Good advertising tells the truth. compares one item with another but only in
•Conforms not only to the laws but also to areas where it is superior, omitting any
the generally accepted standards of good features of the other item that are superior
taste and decency. to the advertised item.
•Seeks public acceptance on the basis of
positive and constructive statements, made Pricing-based Deception
on the merits of the product or service Pricing based deception occurs when
advertised rather than by the disparagement companies or service providers tack on
of competition. additional fees that are not disclosed to
•Does not allow any activity that involves the customers in the advertised price.
exploitation of goodwill, attached to any
firm, product or service. Misleading Illustrations.
•Helps to dignify the individual and In most ads, the illustrations are very
contribute to the building of a civilized enticing that will draw you to believe that
society. you will receive the same as illustrated.
•It is very evident that determined efforts manipulation common just Photo is to
have been pursued in earnest to address enhance and make the item more
concerns on fraudulent advertising. appealing.
CHAPTER 5 planning or consideration.
[Link]-caution buyer- Is someone who
takes an excessively careful and
As individuals we have different attitudes hesitant approach to purchasing decisions.
and behavior in terms of style,mindset [Link]-thinking buyer- Someone who
and ability to spend. Our needs and takes their time to process information
preferences also vary. and make purchasing decision.
[Link] /ill-mannered buyer- Someone
TYPES OF BUYERS who interacts in disrespectful manner
during the purchasing process.
1. Friendly/co-operative buyer- This type 14. Clever/ intelligent buyer- Someone
of buyer is someone who who demonstrates sharp insight and
approaches the purchasing process with strategic thinking during the purchasing
positive and willingness work. process.
2. Timid/reserved/shy buyer- This type of
buyer is someone who approaches TYPES OF BUYER BEHAVIOR
the purchasing process with caution and be 1. Complex buying behavior- Occur when
less assertive or vocal about their you make a significant or expensive
needs and preferences. purchase.
3. Silent buyer- This type of buyer is the 2. Dissonance-reducing buying behavior-
purchasing process with minimal Occurs when the consumer is
verbal communication. highly involved but sees little difference
4. Undecided buyer- Someone who has between brands.
not yet made a final decision about a 3. Habitual buying behavior- Is the buying
purchase. behavior of buying/consumers
5. Price or quality conscious buyer- They where they more repeat purchase several
are both price and quality conscious times of an already known brand
blaming the cost with the high standard. without the process of high involvement and
6. Argumentative buyer- Is someone who decision.
engage in frequently disputes or 4. Variety seeking buying behavior- The
debates during the purchasing process. buying tendency of consumers that
7. Suspicious buyer- Someone who do not have a high involvement with a
approaches the purchasing process with a product when there is a significant
high levels of distrust. difference between brands.
8. Impatient buyer- Someone who is eager FACTORS INFLUENCING BUYER
to complete the purchasing process BEHAVIOR
quickly and may become frustrated with *Social Factors -Family
delays or extended decision making -Roles & Status
periods. -References Groups
9. Bargain buyer- Is someone who actively *Economic Factors -Size of family
seeks out deals,discounts,and the - Disposable income
lowest possible prices. -Propensity to Consume
[Link] buyer- Makes purchase -Consumer Credit
decisions quickly and without extensive *Cultural Factors -Sub culture
-Social class
(wealth,income) [Link] BUYING MOTIVES
*Physiological Factors -Basic needs -Emotional buying motives stimulates an
*Psychological Factors -Motivation individual to make a purchase as a result
-Perception of an appeal to some sentiment or passion
-Learning or urge. it involves the following:
-Beliefs [Link]
-Attitude [Link]
*Personal Factors -Age [Link]
-Occupation EMOTIONAL MOTIVES
-Lifestyle •Amusement
-Personality •Looks/Appearance
•Social approval
BUYING MOTIVES •Pleasure
-A buying motive is an aroused need, urge, •Recognition
or yearning that commences the •Affection
succession of events that may motivate a [Link] BUYING MOTIVES
buyer to purchase something. -Patronage buying motives indicates the
CONSUMERS BUYING MOTIVES buyer to purchase a product from one
•Need particular shop rather than another or from
•Health Benefits choosing one brand over the other.
•Curiosity Reasons may either be rational or emotional
•Admiration or both.
•Fashion PATRONAGE MOTIVES
TYPES OF BUYING MOTIVES •Ambiance
[Link] BUYING MOTIVES •Location
- Rational buying motives inspire the •Customer Service
prospective buyer to make a purchase •Product/Service Quality
based on one’s purpose and
perceptiveness. it involves the following: BUYING ROLES
[Link] INITIATOR
[Link] It identifies the need to buy a particular
[Link] commodity.
Rational Motives INFLUENCER
•Price Their views influence the cluster’s buyer
•Quality and deciders.
•Necessity DECIDER
•Reliability He is the one tasked to approve all or any
•Low maintenance part of the entire buying decisions.
•Durability (What, When, Where, How, How much to
•Simplicity buy)
•Uncomplicatedness
•Safety BUYER
•Economical
The one who selects the suppliers and [Link] Purchase Evaluation
arranges terms of conditions. After the purchase, the consumer reflects
USER on their decision and evaluates their
The end-user. He is the one who consumes satisfaction with the product. This can affect
or makes use of the product or services. future buying behavior and brand
GATEKEEPER loyalty. If satisfied, they may become repeat
He is the one in-charge of controlling the customers; if dissatisfied, they might share
information and access to both decision negative feedback or avoid the brand in the
makers and influencers. future.
LEVELS OF CONSUMERS
DECISION-MAKING
Consumer Decision Making Process The levels of consumer decision-making
The series of steps a consumer goes describe the varying degrees of effort,
through when deciding to purchase a thought, and involvement consumers invest
product or service. It typically involves in making a purchase.
several stages, each influencing the final 1. Habitual or Routine Decision-Making
buying decision. This refers to low-involvement purchases
made frequently with Extended
[Link] Recognition Decision-Making minimal thought.
The first stage where a consumer identifies Consumers rely on familiarity with the
a need or a problem that requires a solution. brand, habits, or convenience.
This could be triggered by internal factors 2. Limited Decision-Making
(like hunger) or external factors Here, consumers make moderately involved
(like advertising). decisions, gathering some information
[Link] Search and considering a few alternatives, but the
In this stage, the consumer seeks process is not too extensive.
information about the options available to [Link] occurs for high-involvement
address purchases that are rare and carry more
their recognized need. This can include significant financial or emotional weight.
gathering information from personal Consumers conduct thorough research,
experiences, friends, online research, or compare many options, and carefully
advertising. evaluate multiple factors before deciding.
[Link] of Alternatives Involvement and Decision Making
The consumer assesses different products Consumer buying decisions are also based
or brands based on criteria like features, on consumer involvement. How involved are
price, quality, and reviews. They compare we prior to making any decisions to
options to determine which best meets purchase something largely depends on
their needs. what we intend to buy.
[Link] Decision
This is the point where the consumer Factors Influencing Decisions
decides to buy a specific product or ● Level of consumer involvement
[Link] decision can be influenced by ● Length of time to make decision
factors such as promotions, availability, or ● Cost of the commodity
peer influence. ● Degree of information search
● Number of available alternatives to be Decision Making Perspective - LOW
considered INVOLVEMENT DECISIONS
High Involvement Problem Recognition —> Limited Search
● Extended Problem Solving —> Minimal Alternative
● Limited Problem Solving Evaluation —> Simple Choice Processes
Low Involvement —> Acquisition Evaluation
● Routinary/Habitual Decision Making Experiential Perspective
•Models of consumers decision making - Problem Recognition (Affect Driven) —>
Hocson Search for Affect-Based Solutions
MODELS OF CONSUMER DECISION —> Alternative Evaluation (Comparison of
MAKING Affect) —> Choice
steps that individuals go through when they (Affect-Based) —> Acquisition Evaluation
are considering a purchase. This process Behavioral Influence Perspective
helps them evaluate different options, weigh Problem Recognition (Results from
the pros and cons, and ultimately make an Discrimination Stimulus) —> Search
informed (Learned Response) —> Choice (Behavior
decision. results from Reinforces) —>
Economic Model Acquisition Evaluation (Self-Perception
This model argues that consumers try to Process)
meet their needs while spending as few
resources (e.g. money) as possible.
Passive Model College Dean- Kathryn D. Tria
Passive decision making follows the path of Associate Dean- Dr. Rome Sheriff G.
least resistance, favoring options that Montoya
are salient and/or easy to choose. BSBA Marketing- Instr. Christian Paul T.
Cognitive Model Mendoza
The cognitive model helps individuals to
focus on the processes through which they
can get information about selected brands.
Psychoanalytical/Emotional Model
The Psychoanalytical Model of Consumer
Decision Making is an emotional model
that considers the role of unconscious
motivations in purchasing decisions.

•Perspective to Consumer decision

making
Decision Making Perspective - HIGH
INVOLVEMENT DECISIONS
Problem Recognition —> Extensive Search
—> Extended Alternative
Evaluation —> Complex Choice —>
Acquisition Evaluation