Understanding the consumer attitudes and behavior is one of the key factors for an organization to successfully tap the business opportunities in the Philippines. This aspect is more crucial especially during crisis periods when there are number of changes in consumer attitudes and behaviors. The marketing managers and advertisers need to know and consider these changes while developing their promotional plans and media-mixes. In the short term, behavioral dimensions maybe even more important than lifestyle or brand attitudes.
Consumers in the Philippines react positively to industries like IT, Telecommunication, Pharmaceuticals and Cosmetics which meets their growing needs in IT, Aviation, Communication and Health sectors. The Filipinos tend to spend more on their needs in these product segments and less on material goods. In the recent years, there has been a cultural shift in the buying behavior of the consumers in the Philippines. Now, they are more inclined to spend on things which they need, unlike before, when they were more keen on increasing their savings.
Hence adapting the product and pricing strategies accordingly so as to meet the needs of the consumers is crucial for any organization striving for growing its business in the Philippines. There are generally three components of a culture: beliefs, values, and customs. •A belief is a proposition that reflects a person’s particular knowledge and assessment of something. •Values are general statements that guide behavior and influence beliefs. The function of a value system is to help a person choose between alternatives ineveryday life. •Customs are modes of behavior that constitute culturally approved ways of behaving in specific situations.
•Culture as an Influence on Consumer Behavior
•Culture is considered an external factor in influencing consumer behavior. Since different cultures have different values, they will have different buying habits. Marketing strategies should reflect the culture that is being targeted. The strategyshould show the product or service as reinforcing the beliefs, values and customs of the targeted culture. Failing to do so can result in lost sales and opportunities.
What influences a Filipino consumer to purchase products or services? The Filipino consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of Filipinos. When purchasing a product there are several processes a Filipino consumer goes through.
Filipinos are affected by many uncontrollable factors. Just think about what factors influences you before you buy a product or use a certain service?
Your friends, your upbringing, your culture, the media, a role model or influences from certain groups?
Culture is one factor that influences behavior. Culture means our beliefs and attitudes. As an individual growing up, these beliefs and attitudes developed. A child is influenced by his father, mother, and siblings and also their close family members who teach the child what the difference is between right or wrong. They learn about their culture and religion, which helps them develop their own attitudes, opinions and beliefs. These factors will influence their purchasing behavior however other factors like groups of friends, or people they look up to may also influence their choices of purchasing a particular product or service.
Culture is the fundamental determinant of buying behavior and decision making. It is the most encompassing of the social environment and is a complex set of values, ideas, and attitudes. Culture develops because we live together with other people in a society, and living with others creates the need to determine what behaviors are acceptable to all members of the group. Individuals absorb cultural values, ideas, and attitudes from families, the educational process, and religious training.
Reference groups are particular groups of people some people may look up towards to that have an impact on consumer behavior. So they can be simply be your favorite boy band like The Backstreet Boys or even a local sensation like Vice Ganda or even your immediate family members.
Perusal of the literature shows that a broad frame of reference for pricing and availability is not adequately developed in the context of study. These studies have focused on few aspects of consumer behaviour with differing perspective. Although researchers agree that the study of understanding contrasting factors defining buying behaviour in rural viz.-a-viz. setup is interesting and important, there is currently little agreement about how best to define these potentially different factors, and hence understand, the psychology of consumer behaviour from the angle of price sensitivity and availability, in particular. This thesis is an attempt to have an integrated and fresh look into the area.
When suggesting that people may form buying habit by considering price, such behaviour is not irrational, In the current environmental setup, how consumer perceives price rises and alters their behaviour to insulate themselves from monetary losses, the impact of prices on consumption. It empirically attempts to verify this strong actual correlation.
We examine another research stream whether buyer patronize products that are available, although sufficient literature exist in defining availability and related areas in specific context, however, referring the rich body of available literature, including earlier reviews that had relatively limited perspectives, we hypothesize that availability redefined may have its impact on forming consumption habits for the consumer.
The literature on pricing & availability is classified on the basis of the contextual problem in forming buying habits. Researcher objective is to present a comprehensive integrated view on research problem to facilitate further research and practice.
To meet this objective, we de'ne few relevant terms with review of earlier research or define them appropriately. .In this chapter, researcher summarize the research gaps identified in the literature on Pricing & Availability and their impact on consumption. It will describe the research questions in detail and explain the logic undergirding the theoretical framework of my research. Literature review will derive underpinning framework to establish justification for the study so that research is theoretically fertile and managerially relevant.
2.2 Consumer Behaviour
(J. F. Engel, 1986) defines consumer behaviour as 'those acts of individuals directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts'. An elementary observation of this definition contributes a limited wisdom into the complex nature of consumer choice process. Consumer Behaviour is the discipline developing to study 'of the processes involved when either individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy their needs and desires' (Solomon, 1995). In perspective of marketing, the term 'consumer' refers the purchase action and aggregation of possible patterns pre-purchase and post purchase behaviour. Pre-purchase action includes the awareness and searching information to evaluate different products or services, which may potentially satisfy the need or want. Post purchase behaviour is an action essentially to evaluate the performance of purchased item viz.-a-viz. expectations thereof and lessen the angst. These behaviour have consequential implications on consumers repurchase behaviour, therefore they are agreeable to marketer, of course in different scale (Foxall, 1995). Social science researcher have been desiring for far more cultivated and refined theoretical concepts and techniques for analysing consumer behaviour. This provides for better understanding of behaviour, more accurate indicator of futuristic view and ensures effective discipline on consumer behaviour.
(D. Marsden, 1998) suggests to elucidate conceptually undergirded framework for consumer behaviour, understanding of fundamenatal paradigms in consumer research and their sequential evolution is important. Paradigms can be safely studied as hypotheses researcher create to answer what to study and how to go about it (Kuhn, 1962). As discussed here, a set of dimensions can be classified to portray and explain contrasts in the various views on consumer behaviour.
With advent and gradual evolution of discipline of consumer behavior, researcher drew from various disciplines such as psychology, sociology, psycho-sociology to social literature (Solomon, 1995). The reason for involving different discipline by social science researcher is to approach consumer issues from different angles and dimensions. Apart from many disciplinary approaches, fundamentally consumer behavior orientation can be safely bifurcated on the basis of their inherent emphasis on intrinsic forces, of which theories are taken from psychology and extrinsic forces have their underpinning in sociology discipline. Besides this focus of analysis ' consumer attitude differs is fundamental premise, and therefore, different aspects of consumption behavior are described by various approaches.
Consumer research has been looked as growing sub discipline of marketing with an ambition to establish its pivotal application in the area of marketing, thus, study of consumer behavior or consumer research has been regarded as discipline of applied social science. In this context, the evaluation of insight or understanding generated of consumer and their behaviour is solely on its pragmatic application to improve the efficacy of marketing.
With this understanding, marketing management essentially has bearing in few concepts of how consumers behave and their response to marketer's product, price, promotion and distribution and its likely impact on the organizational objective. In developed and rich economies, the accomplishment of marketing is not driven as much by merely controlling marketing mix rather in addition is willingness of consumers to patronize, better then the competitor. Consumer orientation marketing is the result of abundant choices and discretionary power exercised by the consumer. (Foxall, Consumer Behaviour , 1987), choice decision taken by consumer do not have implication just for competing industries, rather, it is expanded beyond the conventional definition of traditional industry and markets.
2.2.1 The Traditional Perspectives on Consumer Research
First part primarily discusses the paradigms emerged in consumer research in the period of traditional positivism, and hence earlier developed buyer behavior models proposed by economists are exhibited and later will be pursued by conventional viewpoints. These perspectives are essentially observable by behavior, mental, character/attitudinal and situational lastly. Comprehensively, the ambition of this portion is to frame attributes and key arguments of these viewpoints. An analysis of perspective is following in part two, however conventional perspective with inherent diversity in many aspects is found to be similar in terms of their fundamentals; Philosophical and methodological while exploring consumer behavior, i.e. the platform foundation is rationalism and adhere to the principle of traditional positivism in consumer research.
2.2.2 The Rational Perspective
Traditionally, economists have influenced the buyer behavior modeling and economics viewed consumer behavior as solo act of purchasing and after purchase actions. This theory dictates that purchase decision is result of balanced and attentive economic calculations. Thus, buyer seeks to spend resources on those goods that will deliver the maximum utility (satisfaction) according to his preferences and relative price. The events of this viewpoint can be found in (A. Smith, 1776, A. Marshall, Principles of Economics., 1975) This theoretical work aimed to simplify acceptance and examine the effects of change in one variables I,e, price while keeping all other variables constant.
'Marginal-Utility Model' based on Marshal theory was pragmatic to give explanation of behavioral assumption that lower the price will result into higher sales of the goods, however this assumption does not hold valid when assuming all individuals are calculating machines while taking their purchase decision. The Marshal model overlooks the fundamental probe in, essentially, how product and brand preferences are formed.
(H.J.Westing, 1975) Pure economics cannot provide all logical explanations to alterations in sales numbers, various sub-viewpoints within the field are apt to offer explanations for psychological, preferential, and accumulated demand alterations. As an example, the empirical analysis of economic variable for choice has been good in providing rationally explaining the changes in consumer behaviors. (A. Lewis, 1995) Many research studies have Several studies have described the effect of price on brand preference, changes in product attributes and respective demand variation, price-demand elasticity and goods shortage on consumer choice behavior. Paradigm such as learning theory, reiterate that internal factors influence the consumer behavior rather than external factors, which fundamentally justifies the economic purview of behavior which forms the basis of rationalism.
2.2.3 The Behavioral Viewpoint
As discussed, an opposition to the economic view which highlights the significance of internal cognitive process, the behavioral viewpoint accentuates the role of external factors in learning which causes decision making. Therefore, consumer behavior is a conditioned response to external stimuli. Therefore, behavioral viewpoint emphasizes on external attributes such as advertising that catalyze consumer reaction with learning. (J.P. Peter, 1982) The long term focus of behavior theories, is to arrange behavior m for example, are to arrange a set of expanded behavior alteration tools which can be employed for influencing or controlling consumer behavior.
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