Consumer Psychology, Consumer Behavior, External and Internal Factors Affecting Consumer Behavior

1. CONSUMER PSYCHOLOGY

3. CONSUMER PSYCHOLOGY
“A study that deals with activities that
directly involved in selecting, obtaining,
and using products and services and
ideas to satisfy needs and desires,
including decision processes that
precede and follow these actions. “
Davis and Palladino (1995)

4. CONSUMER BEHAVIOR
“The study of the buying units and
exchange processes involved in
acquiring, consuming and disposing of
goods, services, experiences and ideas.”
Mowen (1995)

5. THEORIES IN DEVELOPMENT OF
CONSUMER BEHAVIOR
 The Rational Consumer Choice Theory
The Opportunity Set or Budget
Constraint Theory
Preference Ordering

6. RATIONAL CONSUMER CHOICE THEORY
The buying capacity of the consumer in dealing
with the price of the product would depend on
his present earning and is considered in the
preferences.
Two steps to carry out preferences:
1) Describe the various combinations of goods the
consumer is able to buy (income level & prices).
2) To select among feasible combinations the
particular one the consumer prefers to all others.

7. THE OPPORTUNITY SET/
BUDGET RESTRAINT THEORY
 Summarizes the combinations of bundles of goods
that the consumer is able to buy
 Determined both in income and prices
 The consumer’s task is to select the particular one
he likes the best
 To recognize bundle, there is a need to summarize,
the consumer’s preferences to those possible
bundles he might consume

8. PREFERENCE ORDERING
Scheme that enables the consumer to rank
different bundles of goods in terms of
desirability or order of preference.

9. NATURE OF
CONSUMER BEHAVIOR
Consumers differ from others; their own
purchasing behaviors would also vary from one
product category to another
The number of effort and amount of time
spend in deciding
Consumers buying and consumption behavior
for the same product would often vary because
of the present situation they are in

10. NATURE OF CONSUMPTION
Needs/Attitudes that influence
consumption decisions
Consumer Lifestyle Consumer Choice
Behavior/Experiences that reduce,
maintain, or enhance lifestyle

11. EXTERNAL FACTORS THAT
AFFECT CONSUMER BEHAVIOR
 Demographic Factors
 Economic Factors
 Situational Influences
 Social Influences
 Social Class
 Technological Influences

12. 1) Demographic Factors: (demography: study of human
populations ex: fertility, mortality, and migration)
useful for providing basic consumer information but
is limited cause they might be:
a) Dated (census done every five years)
b) Too general (data might be too broad)
c) Require profile analysis because a single demographic
statistics is not often useful
d) Social and psychological factors influencing consumer
behavior is not considered

13. 2)Economic Factors: general state of the economy and
the state of individual finances the influences
customer-buying behavior (ex: inflation)
3)Situational Influences: consumer-purchasing behavior
is affected by situations. The following are situational
influences:
a) Purchase Task- there is a reason for the purchase
being made (buying of items for gifts on weddings,
birthdays)

14. b) Social Surroundings- presence of a shopping
companion (close friend, relative from abroad,
lover)
c) Physical Surroundings – crowds in stores, music
display, attractive sales person
d) Temporal Aspects – time of the day, day of the
week (weekday or weekends), weather
e) Antecedent – states such as moods (happy, sad),
the amount or lack of cash at hand

15. 4) Social Influences - Social factors that can change
purchasing decisions. The following are the social
influences:
a) Culture – way of living which includes attitudes,
values , religion etc.
b) Reference Groups – an individual identifies with
a reference groups, making the group the standard
norm (barkadas, idolized groups, religious groups)
c) Family – most immediate and continuous source
of group

16. Social Influence – Family :
4 types of family decision-making structures (Herbst, cited
in Llanes et al., 1996)
c.1. Automatic- husband & wife make decisions roughly an
equal number of times
c.2. Wife-Dominant – wife makes majority of decisions
with little or no input from husband
c.3. Husband-Dominant – husband makes majority of
decisions with little or no input from wife
c.4. Syncratic – husband & wife jointly make the decision

17. 5) Social Class : Culture’s social class structure ranks
people according to the value such culture puts on
factors as parent’s backgrounds, source of income,
education, occupation.
Philippines Social Class Structure
a) Class A – (less than 5% of population) the “social
elite”, live on inherited wealth, and comes from
well known moneyed families (Ayala, Sy, Gaisano)
b) Class B – (10-15% of the population) are
professionals, business people with very
comfortable incomes, living in villages and
subdivisions.

18. c) Class C – (30% of the population) middle class
compose of white and blue collar who earns
average pay and lives in modest houses, which are
located in urban areas and are often rented.
d) Class D – these are the upper- lower class refers to
the working poor who performs unskilled and
menial jobs for minimal wages and some casuals
paid on daily basis.
6) Technological Influences : paves way to brand new
products, products that develop quality of human
life.

19. INTERNAL FACTORS THAT
AFFECT CONSUMER BEHAVIOR
Lifestyle
Psychological Factors
1) Lifestyle- the way people live which
influences people’s interest in various
goods , the goods consumed, the brands
preferred

20. Factors that Determine and Influence
Consumer Lifestyle
Marketing activities Households
Culture Emotions
Subcultures Personality
Values Motives
Demographics Perception
Social Status Learning (memory)
Reference Groups

21. 2) Psychological Factors
a) Attitudes, Beliefs and Values
 Attitudes can be positive (favorable), negative
(unfavorable), or neutral feelings of individual
toward an object.
 Beliefs are strongly held opinions, not
necessarily an objective fact.
 Value is a belief that something, a principle or
an idea is worthwhile and important.

22. b) Learning: involves some change or modification of
behavior to a new one, based on knowledge and
experience in the market.
c) Perception: is a process by which a person selects,
organizes, and interprets stimuli or information received
through the senses, into a meaningful and coherent picture
of the world.
d)Personality: each individual has a unique personality that
may influence buying behavior. Personality refers to a
person’s distinguishing characteristics that determine and
reflect the person’s response to stimuli or environment.

23. THE END