Engle's law states that as income increases, a greater percentage is spent on non-food items and luxuries. Other key factors that influence consumption include price, season/climate, occasion, personal characteristics and choices, modern inventions, advertisements, demonstration effect, urbanization, population, place, education, pride, social interactions, physical environment, and social class. Filipino traits like pakikisama, colonial mentality, hospitality, regionalism, and utang na loob also determine consumption behavior in the Philippines.

1. THE
FILIPINO
CONSUMER

2. FACTORS THAT
INFLUENCE OUR
WANTS

3. Increase in Income
A family consumes products based on income. According to Ernest
Engle, a German economist, if the family’s income is less, a large portion is
spent for needs like food. As family income increases, expenditures for food
lessen, but additional amount is needed for products or services, especially
luxuries. Thus, Engle’s Law states that as income increases, the greater
percentage will be spent on nonfood items or luxuries. This law holds true if
the basic food requirements are met.
Price
The basis of consumption is price. The lower the price, the more
products and services are bought or paid by the consumers. Otherwise,
paying or buying is avoided, or an alternative or substitute is sought.

4. Season, Time and Climate
Time and climate affect variations in consumption. Number of products sold
change as time changes. Umbrellas are in demand during rainy season. During the dry
season or summer, cold drinks are hastily consumed. Electric fans and air-
conditioners are very saleable during summer and not so much salable during rainy
season. Many people build their buildings and houses during summer. Consumption
of electricity is high in the evening. However, commercial centers in the city consume
more electricity during the day.
Occasion
Consumption rates increase in specific products based on occasion. Items like
cards, gift wrappers, scotch tapes and ribbons are easily sold during Christmas season
and New Year. Fresh flowers and candles are salable during All Saints and All Souls
Day. Valentine’s Day shows increase in card consumption and more customers in
restaurants and flower shops. During the school year, especially at its opening, school
supplies like paper, pencil, pen and books are easily sold including the use of the
school bus services and uniforms.

5. Characteristics and Personal Choices
People have different tastes and preferences. This is the reason why the
consumption behavior differs from one person to another. This is due to the following
factors: sex, age, education and hobbies like sports and others. The traits and
personality of a person are reflected in the choice of his products or services
consumed. A rich person goes to five-star restaurants or hotels, wears expensive
clothes and rides in fancy cars. While a thrifty person is contented to be a commuter
and leads a simple life.
Modern Invention and Innovations
Developments in the physical sciences will convince the people to try and test
new inventions or products and services. Examples are computers, ATM bank
services, fax machines, cellular phones, easy-calls and others.

6. Advertisements
New and innovated products are introduced to the public by means of
advertisements. It influences the people especially the children to consume or
patronize their products through advertisements.
Demonstration Effect or “Gaya-Gaya Behavior”
It refers to the consumption of a product by a person or group of persons
leading to the consumption of the same product brought about by imitation.
It is here where one influences the consumption behavior of others. Examples
of these are celebrities being used to advertise the products. Consumption behavior
of your friend or neighbor or idol can influence your own consumption behavior.

7. Effect of Urbanization
New life desired by provincial folks change their consumption behavior. Style,
way of life, action, manner of dressing will be followed by these people to adjust to
city life. This is a matter of bringing the city life to the rural areas.
Population and Place
The greater the population, there is more consumption. Services and products
may be paid because of places like the need for telephone when living in an isolated
place. If one lives in a class subdivision, he will try to buy a new car or adjust to the
way of life of the place.

8. ADDITIONAL FACTORS
INFLUENCING THE
WANTS

9. ✔Personal and inherited traits
Example: One may like the big fish as a viand or dish but others might not like it.
✔Attitudes, behaviors and social interactions
Example: Eating in a big restaurant with the manager or client.
✔Physical environment
Example: People go to Baguio during summer
✔Social class and income
Example: A highly paid man rides in an aircon bus or buys his car while an ordinary
factory worker commutes everyday.

10. ✔Education
Example: Exposure in education whether through the school, books,
seminars, trainings, workshops or travelling may affect our taste and
preference for products that we consume. This may be brought about by
the books or magazines and other reading materials that we read or TV
programs that we watch, or speakers tat we listen to and others.
✔Pride
Example: To maintain our vanity and status, we wear jewelries or ride in
a taxi cab or car.

11. FILIPINO TRAITS:
DETERMINANTS OF
CONSUMPTION

12. ❑ Pakikisama. You will consume or buy a product offered to you by a
friend, close relative or kumpare.
❑ Colonial Mentality. We consume imported products knowing that they
are better than our products.
❑ Hospitality. Due to our being hospitable, we cannot say “no” to our
neighbor or visitor who offers us to buy a product or service.
❑ Regionalism. We tend to patronize products in different regions due to
their specialty. Examples are: Pampanga’s Best, Pangasinan’s Bagoong,
Malolos Ensaymada, Patis of Malabon, Pancit Malabon, Cebu’s Otap
and others.

13. ❑ Utang na Loob or Debt of Gratitude. We cannot forget the debt of
gratitude we owe from a person, thus when she offers us something,
we cannot refuse her.
❑ Cleanliness and Hygiene. We use deodorant, lotion, cologne, perfume,
shampoo, conditioner, astringent, cotton bud, tissue paper and other
paraphernalia for cleansing our body.
❑ Risk Taken. Filipinos enjoy gambling, thus, we have to consume
product that go with it like playing cards, dividendazo for horse racing,
mahjong set and tables and others.