Principles of Marketing/The consumer Markets

1. Rowena C. AlarconRowena C. Alarcon
11
The Consumer MarketsThe Consumer Markets

2.  The Philippine market is dynamic andThe Philippine market is dynamic and
attractive. It is fast growing andattractive. It is fast growing and
changing in all areas ofchanging in all areas of
development:development:
- AgricultureAgriculture -Banking-Banking
- BusinessBusiness - Marketing- Marketing
- EducationEducation - exports- exports
- TourismTourism - Manufacturing- ManufacturingDr.S.G.KulkarniDr.S.G.Kulkarni 22

3. Factors that brings aboutFactors that brings about
changes in the Marketschanges in the Markets
►New technologies- that leads to anewNew technologies- that leads to anew
lifestyles and improved standard of living.lifestyles and improved standard of living.
►Increase in discretionary incomes - thatIncrease in discretionary incomes - that
means more money to spend not only formeans more money to spend not only for
life necessities, but also for leisure andlife necessities, but also for leisure and
recreation;recreation;
►Changes in the demographic structure –Changes in the demographic structure –
composition of the population wherecomposition of the population where
mobility is a popular phenomenonmobility is a popular phenomenonDr.S.G.Kulkarni 3

4.  Changes in attitudes,Changes in attitudes,
dispositions, activities, anddispositions, activities, and
interests that includesinterests that includes
emphasis on physical fitnessemphasis on physical fitness
youth orientation, sports andyouth orientation, sports and
managementmanagement
Dr.S.G.Kulkarni 4

5. The world market is categorized
in many ways
Job market
Baby market
Local market
Retailer/whole sale market for ready-
to-wear clothes,
Cosmetics markets
Dr.S.G.Kulkarni 5

6. What is Market
• - is more than just any place
where buyers and sellers meet.
• Refers to “people” with needs
and wants to be satisfied with
money to spend, and with the
willingness to spend money
Dr.S.G.Kulkarni 6

7. Dr.S.G.Kulkarni 7
Characteristics of MarketsCharacteristics of Markets
1. people with wants and
needs
2. their income or
purchasing power
3. their buying behavior

8. Classification of productsClassification of products
•Convenience goods
•Shopping goods
•Specialty goods
•Unsought goods
Dr.S.G.Kulkarni 8

9.  Convenience goods – are thoseConvenience goods – are those
products that are purchased at theproducts that are purchased at the
least or with minimum effort.least or with minimum effort.
Classification of convenience goodsClassification of convenience goods
StaplesStaples- include rice, sugar, salt and- include rice, sugar, salt and
gasoline that are purchased frequentlygasoline that are purchased frequently
and routinely.and routinely.
Impulse goods-Impulse goods- are items are boughtare items are bought
without prior thinking.without prior thinking.
Dr.S.G.KulkarniDr.S.G.Kulkarni 99

10.  Emergency goodsEmergency goods are purchased becauseare purchased because
of urgency and critically.of urgency and critically.
Dr.S.G.KulkarniDr.S.G.Kulkarni 1010

11. Shopping GoodsShopping Goods
 Are those purchased onlyAre those purchased only
after some amount ofafter some amount of
comparisons have beencomparisons have been
made regarding themade regarding the
products equality, style,products equality, style,
price and colorprice and color
Dr.S.G.KulkarniDr.S.G.Kulkarni 1111

12. Specialty GoodsSpecialty Goods
Are items that are well-Are items that are well-
thought of. Purchasingthought of. Purchasing
these products requiresthese products requires
planning before it isplanning before it is
consummatedconsummated..
Dr.S.G.KulkarniDr.S.G.Kulkarni 1212

13. Unsought GoodsUnsought Goods
 Are those that do not have well-Are those that do not have well-
defined markets. They are sold for nodefined markets. They are sold for no
specific purchasers. Manufacturersspecific purchasers. Manufacturers
hope that their products are able tohope that their products are able to
catch the attention of the consumerscatch the attention of the consumers
enough to make them purchase theseenough to make them purchase these
products.products.
Dr.S.G.KulkarniDr.S.G.Kulkarni 1313

14. Classification of
Consumers
 Personal consumer- is the individual who buys
goods and services for his own use, for house hold
purposes, for family member, friend or any
individual and for any given purpose.
 Organizational consumer- this type of consumers
consist of private business governments agencies,
and institutions., buy products all of which buy
products, equipment, and services to run their
respective organizations.
Dr.S.G.Kulkarni 14

15. The Filipino ConsumerThe Filipino Consumer
 Is the Filipino consumer is difficult toIs the Filipino consumer is difficult to
escribe, to know the way he thinks,escribe, to know the way he thinks,
anticipate his buying habits, and toanticipate his buying habits, and to
satisfy? Is he hard to decipher? Thesatisfy? Is he hard to decipher? The
answer is both yes and no. It yes becauseanswer is both yes and no. It yes because
as we learned earlier, the Filipino, like anyas we learned earlier, the Filipino, like any
other individual, is a person who unique.other individual, is a person who unique.
Dr.S.G.KulkarniDr.S.G.Kulkarni 1515

16. He/she is distinct inHe/she is distinct in
himself/herself with needs, wants,himself/herself with needs, wants,
and expectations based on postand expectations based on post
experience, family backgrounds,experience, family backgrounds,
different personalities, level ofdifferent personalities, level of
intelligences, extend ofintelligences, extend of
motivation, and priorities in life.motivation, and priorities in life.
That is the Filipino consumer.That is the Filipino consumer.
Dr.S.G.KulkarniDr.S.G.Kulkarni 1616

17.  One of the most significant factors that
allows for easy identification of the Filipino
consumer is culture. Let us look at these
examples:
 When Filipino women wash clothes, they
use detergent bars or powder. Although
women today in other countries use liquid
detergents. Filipino women use bar soap
or powder cleansing soap.
Dr.S.G.Kulkarni 17

18.  They enjoy washing clothes in the basins
and making “kuskus” while listening to the
radio in the morning getting informed about
the latest news in the country, and whiling
away the time till late in the morning.
Dr.S.G.Kulkarni 18

19. Young Filipinos, especially women, have aYoung Filipinos, especially women, have a
unique products loyalty called hiyang.unique products loyalty called hiyang.
Once they are satisfied with a product.Once they are satisfied with a product.
Patronage can be assured, StatementsPatronage can be assured, Statements
like “ I wear this make up because my skinlike “ I wear this make up because my skin
is used to it” can be herd from women.is used to it” can be herd from women.
Thus product switching is not often.Thus product switching is not often.
Dr.S.G.KulkarniDr.S.G.Kulkarni 1919

20. ►Filipino women get carried away withFilipino women get carried away with
advertisements. In their desire to haveadvertisements. In their desire to have
physically strong, tall, and healthy childrenphysically strong, tall, and healthy children
who are intelligent and gifted, they readilywho are intelligent and gifted, they readily
buy milk and margarine brands that makebuy milk and margarine brands that make
such claims.such claims.
Dr.S.G.Kulkarni 20

21. ►Eating outside of homes create a certain “Eating outside of homes create a certain “
status” Filipino families likes going out andstatus” Filipino families likes going out and
being seen dining in fine restaurants. Forbeing seen dining in fine restaurants. For
the middle-income families, eating in fastthe middle-income families, eating in fast
foods is likewise a status symbol. Thisfoods is likewise a status symbol. This
explains the popularity of Jollibbee, Mcexplains the popularity of Jollibbee, Mc
Donald's, and KFC.Donald's, and KFC.
Dr.S.G.Kulkarni 21

22. ►Filipinos generally love to wear goodFilipinos generally love to wear good
clothes, spend money on shoes, and go toclothes, spend money on shoes, and go to
salons. They tend to prioritize good lookssalons. They tend to prioritize good looks
than the need to eat nutritious meals.than the need to eat nutritious meals.
►Filipinos gives very great importance onFilipinos gives very great importance on
education. Some parents sell their carabaoseducation. Some parents sell their carabaos
and loan their jewelry and pieces of land toand loan their jewelry and pieces of land to
have money for tuitions fees.have money for tuitions fees.
Dr.S.G.Kulkarni 22

23. Roles of ConsumersRoles of Consumers
►The initiatorThe initiator
►The influencerThe influencer
►The deciderThe decider
►The buyerThe buyer
►The usersThe users
Dr.S.G.Kulkarni 23

24. ►The initiator- is the person who first thinks orThe initiator- is the person who first thinks or
suggest that a product or service be bought.suggest that a product or service be bought.
He brings up the idea, gives the suggestion,He brings up the idea, gives the suggestion,
and makes the first move. For example, heand makes the first move. For example, he
may bring about the idea of buying a pizzamay bring about the idea of buying a pizza
for dinner.for dinner.
Dr.S.G.Kulkarni 24

25. ►The influencer- is the individual whoseThe influencer- is the individual whose
opinions and views have bearing on a givenopinions and views have bearing on a given
purchase decision, his ides are significant.purchase decision, his ides are significant.
He is convincing and has a way of makingHe is convincing and has a way of making
things happen. Once the idea of buying athings happen. Once the idea of buying a
pizza for dinner has been broached, hepizza for dinner has been broached, he
persuades the people at home to pursuepersuades the people at home to pursue
this proposition.this proposition.
Dr.S.G.Kulkarni 25

26. ►The decider- is the person who eventuallyThe decider- is the person who eventually
makes the decisions of what, where, when,makes the decisions of what, where, when,
how often, and how much to buy. He is thehow often, and how much to buy. He is the
person who makes up his mind and givesperson who makes up his mind and gives
the final say with regard to the purchase,the final say with regard to the purchase,
and the circumstances surrounding theand the circumstances surrounding the
specified purchase. The decider in our wayspecified purchase. The decider in our way
example finally decided to buy pizza forexample finally decided to buy pizza for
dinner. He may or may not be responsibledinner. He may or may not be responsible
for the payment of the purchase but the factfor the payment of the purchase but the fact
is, the decider is someone who asks has theis, the decider is someone who asks has the
authority to decide.authority to decide.
Dr.S.G.Kulkarni 26

27. ►The buyer- is the individual who makes theThe buyer- is the individual who makes the
actual purchase. He may be the decideractual purchase. He may be the decider
himself or simply someone who asks to buyhimself or simply someone who asks to buy
product. In our pizza example, the buyerproduct. In our pizza example, the buyer
may be an errand boy, a messenger, or themay be an errand boy, a messenger, or the
decider himself.decider himself.
Dr.S.G.Kulkarni 27

28. ►The user- are the people who use orThe user- are the people who use or
consume the product or service. They areconsume the product or service. They are
the end-users or actual consumers. Theythe end-users or actual consumers. They
are the individuals who eat the pizza forare the individuals who eat the pizza for
dinner.dinner.
Dr.S.G.Kulkarni 28

29. Stages in the buying ProcessStages in the buying Process
►AwarenessAwareness
►InterestInterest
►DesireDesire
►ActionAction
►ReactionReaction
Dr.S.G.Kulkarni 29

30. ►Awareness: buyers are given adequateAwareness: buyers are given adequate
information about given product or service.information about given product or service.
They know that a particular product orThey know that a particular product or
service is available to purchase, They mayservice is available to purchase, They may
know the identity of the seller, too. In theknow the identity of the seller, too. In the
stage of awareness, the buyers attitudestage of awareness, the buyers attitude
toward the item is neutral and indifferent.toward the item is neutral and indifferent.
The buyer does not hunt for additionalThe buyer does not hunt for additional
information and clearly does not want to seeinformation and clearly does not want to see
the product yet as the answer to any of histhe product yet as the answer to any of his
needs.needs.
Dr.S.G.Kulkarni 30

31. ►Interest:Interest: Buyers move from awareness toBuyers move from awareness to
interest. In this stage , there is the assumption ofinterest. In this stage , there is the assumption of
product and service knowledge. There is like wiseproduct and service knowledge. There is like wise
some understanding and a degree of likeness orsome understanding and a degree of likeness or
even, appreciation. The buyers now recognize thateven, appreciation. The buyers now recognize that
the product may provide benefits in what everthe product may provide benefits in what ever
form: health, satisfaction, cash, opportunity, orform: health, satisfaction, cash, opportunity, or
what ever. The buyer spend some thought on thewhat ever. The buyer spend some thought on the
product or service, whether it is beneficial, weatherproduct or service, whether it is beneficial, weather
the price is acceptable, or whether the productthe price is acceptable, or whether the product
might fill a need. In this stage, buyer activelymight fill a need. In this stage, buyer actively
collects some information.collects some information.
31

32. ►Desire: In the desire stage, buyers areDesire: In the desire stage, buyers are
confident that they have a need for aconfident that they have a need for a
particular product ar service and that theyparticular product ar service and that they
like it so much to want it. They picturelike it so much to want it. They picture
themselves enjoying the products and thethemselves enjoying the products and the
satisfaction that it firmly believes it will andsatisfaction that it firmly believes it will and
can deliver.can deliver.
Dr.S.G.Kulkarni 32

33. ►Action: When buyers desire is strongAction: When buyers desire is strong
enough, he decides to buy the product. Thisenough, he decides to buy the product. This
time, the impulse of the buyer to buytime, the impulse of the buyer to buy
immediately outweighs the inclination toimmediately outweighs the inclination to
postpone the act. The purchase act ispostpone the act. The purchase act is
consummated in the action stage.consummated in the action stage.
Dr.S.G.Kulkarni 33

34. ►Reaction: Whatever the out come is, theReaction: Whatever the out come is, the
buyers feels the stimulus and responds withbuyers feels the stimulus and responds with
a specific action. What resulted willa specific action. What resulted will
influence his behavior the next time theinfluence his behavior the next time the
buyer encounters the same or similarbuyer encounters the same or similar
experience/stimulus.experience/stimulus.
Dr.S.G.Kulkarni 34

35. ►On one whole sheet of paper write andOn one whole sheet of paper write and
explain the 5 Roles of Consumersexplain the 5 Roles of Consumers
Dr.S.G.Kulkarni 35

36. The Buying Decision ProcessThe Buying Decision Process
►It is technical process that a consumerIt is technical process that a consumer
undergoes in deciding the purchase of anyundergoes in deciding the purchase of any
product or service. The process includesproduct or service. The process includes
need recognition, information search, andneed recognition, information search, and
evaluation of alternatives, purchaseevaluation of alternatives, purchase
decision, and post-purchase-decision.decision, and post-purchase-decision.
Dr.S.G.Kulkarni 36

37. Buying-decision processBuying-decision process
►Need Recognition: The consumer’s firstNeed Recognition: The consumer’s first
step in entering the market is a conscious orstep in entering the market is a conscious or
unconscious recognition that an individualunconscious recognition that an individual
has a problem.has a problem.
►Information Search: The search for product-Information Search: The search for product-
related information is a vital activity forrelated information is a vital activity for
consumers. Any information gathered willconsumers. Any information gathered will
largely determined his purchase action.largely determined his purchase action.
Dr.S.G.Kulkarni 37

38. Business sources of information generallyBusiness sources of information generally
came from mass media, personal salescame from mass media, personal sales
people( door to door or telephone), and retailpeople( door to door or telephone), and retail
store.store.
Dr.S.G.Kulkarni 38

39. 5 Important factors that affect5 Important factors that affect
consumer search for informationconsumer search for information
1.1. ExperienceExperience
2.2. Availability of product or serviceAvailability of product or service
information without searching.information without searching.
3.3. Satisfaction derived from informationSatisfaction derived from information
search.search.
4.4. Perceived consequences of informationPerceived consequences of information
searchsearch
5.5. Value placed on products/servicesValue placed on products/services
Dr.S.G.Kulkarni 39

40. Evaluation of alternativesEvaluation of alternatives
►An effective search forAn effective search for
information is pointlessinformation is pointless
unless the consumer makesunless the consumer makes
use of gathered data touse of gathered data to
evaluate alternatives.evaluate alternatives.
Dr.S.G.Kulkarni 40

41. ►In order to do so, the consumeIn order to do so, the consume
should:should:
1.1.Synthesize collected informationSynthesize collected information
2.2.Establish a decision criterionEstablish a decision criterion
3.3.Determined the types ofDetermined the types of
alternativesalternatives
4.4. more or less sure purchasemore or less sure purchase
decisiondecision
Dr.S.G.Kulkarni 41

42. Purchase-DecisionPurchase-Decision
►Means selecting one alternative fromMeans selecting one alternative from
among many possible choices.among many possible choices.
Dr.S.G.Kulkarni 42

43. Post-purchase DecisionPost-purchase Decision
►Post purchase evaluation is the final stagePost purchase evaluation is the final stage
in consumers decision making process.in consumers decision making process.
Dr.S.G.Kulkarni 43

44. Types of Buying DecisionTypes of Buying Decision
BehaviorBehavior
High involvements products and purchasesHigh involvements products and purchases
1.1.Is expensiveIs expensive
2.2.Can have serous social consequencesCan have serous social consequences
3.3.Can reflect on ones social image.Can reflect on ones social image.
Dr.S.G.Kulkarni 44

45. ►Routine Problem-Solving. For products suchRoutine Problem-Solving. For products such
as toothpaste, cigarettes, and milk,as toothpaste, cigarettes, and milk,
consumers recognize a problem, make aconsumers recognize a problem, make a
decision, and spend little effort seekingdecision, and spend little effort seeking
external information and evaluatingexternal information and evaluating
alternatives.alternatives.
►Limited Problem-Solving- In limited problemLimited Problem-Solving- In limited problem
solving, consumers typically seek somesolving, consumers typically seek some
information or rely on a friend to help theminformation or rely on a friend to help them
evaluate alternativesevaluate alternatives
Dr.S.G.Kulkarni 45

46. Extended Problem-Solving – In extendedExtended Problem-Solving – In extended
problem-solving, each of the five stages of theproblem-solving, each of the five stages of the
consumers purchase decision process isconsumers purchase decision process is
undertaken, including time and effort onundertaken, including time and effort on
external information search and identificationexternal information search and identification
and evaluate of alternatives.and evaluate of alternatives.
Dr.S.G.Kulkarni 46

47. Strategies to Focus on ConsumerStrategies to Focus on Consumer
Buying BehaviorBuying Behavior
►Companies should take into considerationCompanies should take into consideration
the consumers behavior toward newthe consumers behavior toward new
products.products.
►They should adopt an effective researchThey should adopt an effective research
approach using surveys, observation,approach using surveys, observation,
samplings, and case studies, whensamplings, and case studies, when
applicable or necessary.applicable or necessary.
Dr.S.G.Kulkarni 47

48. ►Once the date have been gathered, properOnce the date have been gathered, proper
interpretations and reporting of findingsinterpretations and reporting of findings
must be performed by the marketingmust be performed by the marketing
manager with the expertise and explanationmanager with the expertise and explanation
of the researchers.of the researchers.
►Planning and preparing appropriatePlanning and preparing appropriate
marketing strategies addressing consumermarketing strategies addressing consumer
buying behavior.buying behavior.
Dr.S.G.Kulkarni 48

49. CASE: outsourced generation page 103-104CASE: outsourced generation page 103-104
►Before producing new products, companiesBefore producing new products, companies
should conduct a thorough research orshould conduct a thorough research or
consumer choices so as to avoidconsumer choices so as to avoid
manufacturing unsought goods.manufacturing unsought goods.
Dr.S.G.Kulkarni 49

50. ►THANK YOU AND GOD BLESSTHANK YOU AND GOD BLESS
Dr.S.G.Kulkarni 50