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Consumer Markets - A consumer market is a TRADITIONAL CONSUMER BEHAVIOR MODELS

system where customers buy products and
• Learning Model- people make buying
services for consumption or sharing with others
decisions based on what they've learned from
rather than for reselling
past experiences.
Consumer Buyer Behavior - the sum of a
 Needs- Consumer purchase decisions
consumer's attitudes, preferences, intention,
can be influenced by basic needs.
and decisions regarding their behavior in the
marketplace when buying a product or service.  Learning - The consumer may have tried
the product, seen ads, or heard about it
from a friend.
Types of Consumer Behavior Models  Reinforcement - Consumers are more
likely to repeat their purchase decisions
Traditional Consumer Model if they had a good experience.
 Motivation - Motivation can be intrinsic,
 Learning Model
like the satisfaction of reaching a goal, or
 Psychoanalytical model extrinsic, like winning a lottery.
 Sociological Model
 Economic Model • The psychoanalytical model says a
consumer’s purchase decision is influenced by
Contemporary Consumer Behavior Model
unconscious factors of human behavior.
 Engel-Kollat-Blockwell (EKB) Model
 Block Box Model  Unconscious Motivation - This
motivation can come from past
 Hawkins Stern Model
experiences or be connected to feelings
 Howard Sheth Model
of nostalgia.
 Nicosia Model
 Webster and Wind Model  Symbolic Meaning - personal desire,
experience, or identity

 Defense Mechanisms people buy things

to cope with emotions like depression
or anxiety.
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• Economic Model - Consumers try to get the • Black Box Model - it considers the input and
most satisfaction by spending their limited output of the decision-making process.
money wisely.
 Stimulus- It generally happens through
 Diminishing marginal utility - This advertising or word-of-mouth
means consumers buy more items to marketing.
feel more satisfied.  Decision -Making Process-Consumers
 Budget constraints Consumers make process information and evaluate
purchasing decisions based on the options before making the final
money they have available. purchase decision
 Price elasticity - Consumers' buying  Output - Finally, at this stage,
decisions depend on price and income. consumers make their final purchase
decisions.

CONTEMPORARY CONSUMER BEHAVIOR Hawkins Stern Model - describes how

MODELS consumers make impulse purchase decisions.

• Engel-Kollat-Blackwell (EKB) Model -The  High value -It can happen due to the
Engel-Kollat-Blackwell theoretical framework high demand for the product or even a
describes five stages of the purchase decision low stock with higher satisfaction.
making process
 Extreme stimuli -The purchase decision
 Need recognition - Consumers can be influenced by hunger, stress,
recognize they need a product to solve thirst, or excitement.
a problem they have.
 Information search - Consumers begin
searching for information on different • Howard Sheth Model -different approach to
products to solve their problem. purchase decision-making Instead of just simple
 Evaluation of alternatives Consumers input and output, it considers various factors.
compare the products they’ve
researched, weigh the pros and cons,  Extensive problem solving -Consumers
and then choose the one that best suits have to do thorough research from
their needs. scratch.
 Purchase decision - consumers make  Limited problem-solving -In this
the final decision to purchase the category, customers are familiar with
product they selected. the product or brands. But consumers
 post-purchase evaluation - Evaluate if still need some additional information
that product really solves the issues or to make a final purchase decision.
not.  Routinized response behavior -This
category shows effortless decision-
making without any additional research.
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• Nicosia Model – the relationship between FOUR MAIN TYPES OF BUYING DECISION
consumers and sellers in four different fields. BEHAVIOR

 Input Field -Consumers get information • Complex buying behavior expensive

about products through external purchases that require a lot of involvement.
stimuli. • Dissonance reducing buying behavior-This
 Perceptual Field - consumers get all the type of behavior is also associated with high
information needed about the products involvement in the buying process, often due to
and process it to match their’ the high price or infrequent purchase.
perceptions. • Habitual buying behavior - This happens
 Learning Field - the consumer built when consumers purchase something on a
through information’s they started regular basis, but they are not emotionally
exploring the product. attached to a brand.
 Output Field -the consumer takes the • Variety-seeking buying behavior -This type of
step to make a final purchase decision. behavior is characterized by low involvement in
the purchase decision, where the customer
• Webster and Wind Model - focused on switches among brands for variety or curiosity.
organizational purchase decisions.
BUYER DECISION PROCESS
 Organizational factors - An
organization’s goals and limits affect Problem recognition - The first step, where the
product priorities, which influence consumer identifies a need or problem they
buying decisions. want to solve
 Individual factors -The person who is Information search -The consumer gathers
information about products or services that
responsible is another factor in the
could solve their problem
purchasing decision.
Evaluation of alternatives -The consumer
 Environmental factors -Economical, compares the options they've identified and
technological, or competitive decides on the best choice
environments can have a big influence Purchase decision -The consumer decides what
on the buying decisions of to buy and where to buy it from
organizations. Post-purchase evaluation -The consumer
reflects on their purchase and decides if they're
satisfied with it
CHARACTERISTICS AFFECTING CONSUMER
BEHAVIOR
WHAT IS A PRODUCT?
• Psychological
• Personal A product is anything offered to the market to
• Social meet a need or want. It can be a physical item,
• Cultural service, idea, experience, or a mix of these, like
• Economic cars, food, healthcare, or customer service.
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MAJOR CLASSIFICATIONS OF PRODUCTS AND FOUR CHARACTERISTICS THAT AFFECT THE

SERVICES: MARKETING OF SERVICES

 Convenience Goods  INTANGIBILITY -Services are not

 Shopping Goods physical and cannot be seen, tasted,
 Specialty Goods felt, heard, or smelled before they are
 Unsought Goods bought.
 INSEPARABILITY -The production of the
service is often simultaneous with its
consumption, making it impossible to
Convenience Goods
separate the service from the service
Convenience goods are low-cost items
provider.
that consumers buy regularly and with little
thought, often choosing the same brand out of  VARIABILITY -The quality and
habit. consistency of services can vary
significantly depending on who provides
Shopping Goods it, when, and where.
Consumers buying shopping goods  PERISHABILITY -Services cannot be
often research and compare options since these stored for later use or sale
higher-priced items justify the time spent on
finding the best value. Example houses, cars What is Branding?
Branding is the process of giving a
Specialty Goods meaning to specific organization, company,
Specialty goods are unique products products or services by creating and shaping a
with loyal followings, leading consumers to go brand in consumers’ minds.
to great lengths to obtain them. Rather than
comparing brands, buyers seek a specific item,
such as Ferraris, GoPro cameras, or iPhones.

Unsought Goods
Unsought goods are products consumers
don't consider buying, often purchased out of
fear or necessity, like life insurance or fire
extinguishers. Batteries are another example,
bought only when replacements are needed.

WHAT IS SERVICE MARKETING?

Service marketing is about promoting and selling WHAT IS PRICE?

services to customers by highlighting their value Price is the amount of money or
and benefits to attract and retain them. compensation that a buyer pays to a seller for a
product or service.
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5 MAJOR PRICING STRATEGIES: • It needs an effective price monitoring system.

Automation is key in this respect to avoid
1.Cost-Based Pricing - Cost-based pricing sets manual tracking
the product price based on production costs
plus a profit margin. 4. Price skimming Price skimming is when
companies charge a high price for new,
Pros: innovative products with no competition, then
• Calculations to determine price are simple. gradually lower the price over time.
• During price setting unknowns are taken into
account. 5. Penetration pricing- Penetration pricing
• Pricing ensures total profits for the business. involves setting a low price initially to quickly
Cons: gain a large customer base. However, success
• Ignores how customer demand affects price. only happens if the profit margins are high
• It doesn’t take into account actions by enough to cover costs.
competition.
• Price setting cannot be solely based on costs. PRICING DECISIONS: INTERNAL AND EXTERNAL
FACTORS
2. Value-based pricing strategies - Customer-
based pricing sets a product’s price based on (A) Internal Factors:
the benefits it offers and what customers are
willing to pay. 1. Organizational Factors: Pricing decisions are
made at two levels: executives set the strategy,
Pros: while production and marketing specialists set
• The price set supports product image. the price.
• The value-added helps increase product sales.
• Differentiation attracts new customers. 2. Marketing Mix: Marketing experts see price
Cons: as just one part of the marketing mix. If a
• Calculations may ignore product costs. company raises its prices, it might also improve
• It might forget about existing competitors. packaging or launch a new ad campaign.
• It requires great selling techniques.
3. Product Differentiation: The price of the
3. Competition-based pricing strategies - product also depends upon the characteristics
Competitive pricing sets a product's price based of the product.
on what competitors charge.
4. Cost of the Product: Cost and price of a
Pros: product are closely related.
• It keeps an eye on existing and emerging rivals
in the industry and provides smart data to make 5. Objectives of the Firm: A firm may have
more effective pricing decisions. various objectives and pricing contributes its
• Setting the right price according to market share in achieving such goals
state helps gain competitiveness.
Cons:
• You risk losing profits if you do not take into
account information on your purchase price and
margins. You need to check on your price
elasticity.
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(B) External Factors: Here are some product mix pricing strategies:

 Demand: • Product line pricing - Offers a range of similar

 Competition products at different price points, based on fea-
 Suppliers tures, style, or quality
 Economic Conditions • Optional product pricing -Offers add-ons or
 Buyers extras for the main product at an additional
 Government cost.
• Captive product pricing -Prices the main
product competitively while charging more for
CONSIDERATIONS AFFECTING PRICE DECISIONS essential supplementary products
• By-product pricing -Sells or reuses by-
• Cost products from the production of the main
• Competition product to offset production costs.
• Company objectives • Bundle product pricing -Combines several
• Economic conditions products and offers the bundle at a reduced
• Distribution channels price than buying each item separately.
• Customer perceptions
WHAT IS MARKETING CHANNELS
Other factors that can affect pricing decisions
include: A marketing channel is businesses use
• Government and legal regulations to communicate with a market segment and
• Marketing methods guide them through the customer journey.
• Brand awareness
• Market penetration Example:
• Market trends • Email marketing -A direct marketing strategy
• Market development prospects that involves sending promotional emails to a
target audience.
A. Pricing Strategies • Search engine optimization (SEO) -A practice
- New-Product Pricing Strategies that involves optimizing a website or digital
- Product Mix Pricing Strate content to rank highly for keywords that a target
audience searches for.
- Product Mix Pricing Strategies • Content marketing -A strategy that involves
creating and sharing content to attract and
A product mix pricing strategy sets engage an audience. This content can include
prices for all products in a company's product articles, videos, or podcasts.
range, which includes different product lines • Social media marketing -A strategy that
and variations. involves using social media platforms to connect
with an audience.
• Influencer marketing -A strategy that involves
collaborating with individuals who have a
following to increase brand exposure. Other
marketing channels include:
Pay-per-click (PPC) ads, Event marketing, Print
ads, Podcasts, and Video marketing
EMAIL MARKETING
- Online shopping like (shein, Lazada,
shoppee, etc)
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CHANNEL BEHAVIOR AND ORGANIZATION

THE NATURE AND IMPORTANCE OF
MARKETING CHANNELS A marketing channel consists of firms
Marketing channels are a vital part of an that have banded together for their common
organization's marketing strategy. They are the good. Each channel member depends on the
connection between a business and its others.
customers, and are responsible for many
important functions, including: • Conventional distribution channels -Consists
• Promotion -Marketing channels use of independent producers, wholesalers, and
intermediaries to promote products, introduce retailers, each seeking to maximize their own
new products, and explain their features to profits.
customers. • Vertical marketing systems (VMS) -Consists of
• Brand awareness -Marketing channels producers, wholesalers, and retailers that act as
help create brand awareness and generate a unified system.
demand for products through advertising and • Channel power -The ability of a channel
branding. member to influence or control another channel
• Pricing -The number of intermediaries member.
involved in a marketing channel can impact the • Channel roles -Defining the behavior of each
final price of a product. channel member.
• Customer support -Marketing
channels provide customer support and after-
sales service by addressing customer queries, CHANNEL DESIGN DECISION
complaints, and feedback.
• Distribution -Marketing channels Channel Design Decisions refer to the
ensure that products are delivered to the strategic choices and actions taken by a
correct location, at the right time, and in the company to create an effective distribution and
desired condition. communication network for its products or
• Market reach -Marketing channels services.
help businesses overcome geographical distance
and time differences, allowing them to cater to
a larger customer base.

When selecting channel members, some

factors to consider include:

1.Compatibility,
2.Capability,
3.Commitment,
4.Cooperation,
5.Communication,
6.Coordination