Salamilao, Christopher L. 1. Should perfectly competitive firms use advertisements to promote their goods and yield higher profits?

Why or Why not? -I think perfectly competition does not advertising their product for the reason that There is no need to spend money on advertising, because there is perfect knowledge and firms can sell all they can produce. In addition, selling unbranded goods makes it hard to construct an effective advertising campaign. And Supply and demand meet perfectly only in perfect conditions. 2. List down the five most important factors that you consider in purchasing a good. Interview three people and ask them the same question. Search the internet or books for article on the said factors and compare your and your friends answer. Are you going to reconsider your top five qualities? Why or why not? -These are the factors that I am going to consider in purchasing a good are; Product Manufacturer, Quality, Price, Seller Reputation, and time. While am interviewing the person to gather information, I noticed that their responses and importations given are matches on my answered. Yes, I am very much reconsidered my top five qualities. Because it could help me to be aware, knowledgeable, and wisely consumer. Wherein through this, I can say that the consumers will be more aware in our economy and business world. Because they should think first before making a decision in purchasing a good. 3. List down three examples of perfectly competitive, monopolistic, and oligopolistic firms that can be found locally and explain( with Supporting information) why you classify them such. -Perfectly Competitive my examples are; Market, Tiangge, and any Agricultural Industry. -Monopolistic my examples are; Electronic Company, Electric Company, and Telephone Company. And -Oligopolistic my examples are; Telecom Companies, Gas Station Companies, Mobile Network, and Steel Industry. I classify them such by each. First, perfectly competitive because it is characterized by many buyers and sellers, many product that are similar in nature. As a result, many substitutes. Perfect competitions means for me there are few, buy if any; barriers to entry for new companies and prices are determined by supply and demand. For example, in competitive market, should a single firm decide to increase its selling price of good. The consumer can just turn to the nearest competitor for a better price. Causing any firms increases it to prices to lose market share and profits. Second, monopolistic because it is a market structure in which there is only one producer and seller for a product. In other words, the single business is the industry. Due to high cost and other impediments, which maybe economic, social or political. For instance, a government can create a monopoly over an industry that is once to control, such as electricity. Lastly, Oligopolistic because there are a few firms that make up an industry. This select group of firms has control over the price. Like a monopoly, and oligopoly has high

barriers to entry. The product that the oligopolistic firms provide are often nearly identical and, therefore the companies which are competing for market share, are interdependent as a result of market forces. For example, mobile network like smart and globe. Smart produces 50 free txt to other network and its competitor, globe produce the other 50. The service of the two network companies will be interdependent and. Therefore, similar, so, if smart company produces free text at a lowe price it will gwet greater market share, thereby globe company to produce free text as well.

4. Based on the behavior of the firms you listed above, create your own top five money saving tips for consumers who patronize their products. Support your answers with valid literature and data if necessary. -Ask for a discount and a good deal. ask for your current providers utilities, phone, cable, and internet services what their current new customer deals are, and ask whether your can take advantage of those or other discounts. -I will buy something on sale before i pay full price if theres little difference between the products. -Do not shop when you are tired or hungry. Because you will spent more money. -Compare price. Bigger does not always cost less per ounce. Find out how much the item cost per ounce. Because many stores put this price on the product sticker on the shelves. -Do not be impulsive in buying products that wouldnt give you the benefits. -Shop with a list. Do not buy anything you did not plan to buy. -Look for a cheapest price but the quality is good and can use a long time. In low-income neighborhoods. They have to charge higher prices.

LITERATURE REVIEW Consumer Behaviour Christopher (1989) studied the shopping habits of consumers to form an idea of whether or not the store concepts, product ranges and strategies of the companies are appropriate towards consumer requirements. He believed that consumer behaviours are unpredictable and changing continuously changing; while trying to under try to understand how individual or group make their decision to spend their available resources on consumptionrelated items. These are factors that influence the consumer before, during, and after a

purchase (Schiffiman and Kanuk, 1997), for example, feedback, from other customers, packing, advertising, product appearance, and price (Peter & Olsonetc, 2005). The essence of this approach is critical for organisational success, so that they can have a better understanding of their customer behaviours (Solomon et al., 2006). The physical action or behaviour of consumer and their buying decision every day can be measured directly by marketers (Papanastassiu and Rouhani, 2006). For that reason many organisations these days are spending lot of their resources to research how consumer makes their buying decision, what they buy, how much they buy, when they buy, and where they buy (Kotler, Amstrong, 2001). To get a well coherent result, organisations normally looked at these behaviour base their analysis on difference conceptions; whether customers buying behaviour were measured from different perspectives, such as product quality and better service, lower price structured etc (Papanastassiu and Rouhani, 2006) Different theories and researchers have claimed that when organisation fully meet all aspects of its customer needs, the result enhances their profitability (Chaudhuri, 2006), and also enable them to develop a better tackling strategies for consumer (Asseal, 1998). Possibly, the most challenging concept in marketing deals with the understanding why buyers do what they do and what method or philosophy are they using to evaluate the product after the transactions and what might be the effect on future transaction (Schiffman, 2004). The reason why marketer chooses to learning about consumers buying behaviour is, from a business perspective; to be able to be more effectively reach consumers and increase the chances for success (Sargeant & West, 2001). Therefore the field of consumer behaviour has take a tremendous turn in the commercial world and became the fundamental concepts of achieving company goal (Schiffman and Kanuk, 2007). More recently, different researchers and author have given their definition and meaning of consumer behaviour. For Michael R. Solomon (2001) consumer behaviours typically analyse the processes of group selected or individual purchases/dispose of product, service, concept or experiences to satisfy their need and desires. Additionally, Kotler (1996) suggested that consumer behaviours have a huge impact in a firm marketing decision making process every year. There is a risk that what a consumer does will inflict on his or her behaviour and generate consequences. (Snoj, Pisnik Koda & Mumel, 2004). The user and the purchaser can be different person, in some cases; another person may be an influencer providing recommendations for or against certain products without actually buying or using them (Solomon 1999; Solomon et al. 1999). In this case, most of the large consumer electronics retailers tend to gathered more information about customers motivating factors and what influences their buying behaviours Solomon & Stuart (2000). To get in-depth understanding consumer behaviour concepts will gives us an idea on how its plays significance role in our life and in the whole trend of business profit to various firms which will allow the researcher to get the analysis and determine product positioning, develop the

message and targeting strategy in order to reach to the market (Holskins J, 2002). Consumer behaviour involves lot aspects, such as; Complex Buying Behaviour This kind of buying behaviours significantly involved the consumers when making a purchase decision. This kind of buying behaviours demand consumer to highly involve within the process. In case of high involvement, consumers distinguish salient differences among the competing brands (Kotler, Wong, Saunders, Armstrong, 2005). This phenomenon is particularly essential for Dixons consumers to highly involve, and engage in extensive research about the product category and make a good purchase decision about the firm own manufacturing products, in case they invent a new technology electronics products or audio-video equipment that is too expensive.

Dissonance reducing buying behaviour This type of buying behaviour also has high consumer involvement. In terms of expensive and infrequent purchase, consumer also undergoes reducing dissonancy behaviour. It is extremely difficult for consumers to differential among brands in this type of buying behaviours (Kotler, Wong, Saunders, Armstrong, 2005). Differentiating Dixons electronics products/equipments in the same store from PCWorld or Currys is a daunting task and consumer buying these products may encounter dissonance reducing buying behaviour, as electronics are usually expensive and self-expressive. Consumer may easily assume that the available electronics brands in the store/market within a certain price range to be of the same quality. Then if the product does not meet customers expectations, it will result to consumer to experience post purchase dissonance (after sales discomfort) (Kotler, Wong, Saunders, Armstrong, 2005). Habitual Buying Behaviour Contrariwise, in this type of buying behaviour consumers have lesser levels of involvements. It implies that consumer do not have to bother to retrieved information about the available products and brands in the market. So therefore, there are no potential differences between the different brands. Whether this factor will have damaging effects on Dixons will be analyse at the findings and analysis chapter below. Because of the less level of involvement, in habitual buying behaviour consumers dont often go to the stores to purchase product, (Kotler, Wong, Saunders, Armstrong, 2005). However, some believed that if the consumer persistently purchasing the same product repeatedly, it becomes habit and their mindsets and perceptions changes overtime about the brand and the provider (Cohen and Manion, 1987). This conception will portray the consumer to have unconscientiously developed a brand loyalty to that particular brand due to the consumer regular buying habits (Cohen and Manion, 1987).

Variety Seeking Buying Behaviour This type of consumer level of involvement is low. However consumer may became critical in terms of brand differences. Additionally, consumer may easily switch from PCWorld to Currys i.e. from one brand to another. The consumers can now have beliefs about the various brands and choose a brand without much evaluation. But they evaluate that product at the time of purchase. In this high technology world, consumer switches their brands not because of dissatisfaction but because of that enormous trend of technological equipment (Aaker, 1991). 1.2 Decision making The concept of decision making perceived by buying behaviour as a problem-solving activity that consumer undergo to solve different problems. The stages include; need recognition, striving for information, evaluates the alternative, purchase decisions, and post-purchase evaluations. Consumer decisions making can sometimes be confusing and relate to many ideas and beliefs. There are numerous perspectives of consumer decision making that include the cue utilisation theory, value perspective, emotional perspective, and information processing perspective.

Value perspective

This emphasises a trade-off circumstances (Lunn et al, 1997). The common value terms often involve in the trade-off between quality and price, which also may also be defined the valuefor-money between quality and price, which also may defined the value-for-money perspective (Change and Wildt, 1994; Hansen, 2001; Sweeney and Soutar, 2001). Zeithaml (1988) and Levy (1999) purpose that consumers are value driven. Zeithaml (1988) claims that customers perceived value may be seen as a reacting of the overall evaluation of the consumption of a product or service based on perceptions of what is received and what is given. On the other hand, the value emerges partly from what consumers perceive they are receiving and partly from what consumers perceived they are giving. Moreover, Blackett and Robins (2001) consistently said that the key drivers of demand for products are awareness/familiarity, perceived quality, sales quality and price. These tool drivers influence the perception of customer in term of the decision making. .

Cue utilization theory

This phenomenon allowed consumer to judge the quality and multiplicity of different product when deciding what to purchase and how many. Hansen (2005) opined that, perhaps it might be extremely hard for consumers to evaluate the essence of different in quality aspects in relation to each other and in relation to requirement or intention to consumer the products.

This has led consumers to encounter instabilities when making judgements about product quality, but may not have sufficient of time or the motivation to the considered products comparative. Attempting to overcome their uncertainty and the shortage of information, following the cue utilization theory (Olson and Jacoby, 1972), consumers may select one or more indicators (cues or stimuli) to help their judgement of the product quality. A number of cues are studied in many researches. In judging the product quality, these cues can be used to indicate, including country of origin (Eliot and Cameron, 1994), product composition (Olson, 1972), brand name, store name (Dodds, 1995) and price (Shapiro, 1973; Brooker et al., 1986). As mentioned in the cue utilisation theory, consumers try decrease risk by applying cues (e.g. brand name, price, colour, advertising, etc) as a way of determining the service or the product quality. Thus, the reliance on one or one or more cues is a risk-reduction strategy (Hansen, 2005). Dawar and Parker (1994) depicted that cues assist consumers to determining the quality of the product when there is a need to reduce the perceived risk of purchase and when consumer involvement is low. Low-involved consumers use simple decision ways or indicators in their assessments to the quality or the overall performance of a product. In contrast, the behaviour of high-involved consumers are analysed and described on the basis of the information processing perspective.

Information processing perspective

The information processing perspective indicated that consumer act as problem-solving cognitive individual researching for a reasoned decision (Kassarjian, 1981). Dubois (2000) describes that consumers are expected to apply their cognitive resources in creating beliefs (cognitive part) about the attribute of a product, which may result of the progression of an overall feeling (affective part) in the sense of liking/disliking product. Consumers with a positive attitude to a product are expected to be more willing to consider purchasing in (cognitive part) than consumers with less positive attitude to the same product. Emotional perspective Emotion is not the response of an evaluation process in buying a product, but it is an effective reaction to consumers perceptions of stimuli in the environment. It represents an effective view of consumer behaviours and it is caused by consumers appearance to particular stimuli (Bagozzi et al., 1999). Zajonc and markus (1982) discussed that the traditional cognitive view should be complemented by determining consumers affective responses, like the emotional responses to the perception and assessment of products and experiences. Consumer involvement also influences to emotion perspective and product evaluations. Peter et al (1999) debated that if product involvement is high, people may experience stronger affective reaction such as emotions and stronger feelings. 1.2.1 Additional Factors on Decision Making

There are many other causes that have tremendous effect on consumer decision making process, such as perceptions and attitudes. Perceptions Perceptions take consumers to the process of selecting, organising, and interpreting stimuli to a meaningful and coherent picture of the world (Schiffman and Kanuk (2007). Because there are so many marketing stimuli, consumers need to limit the information of product that will have an effect on the decision making. Bolfing (1988) also purposed that there are plenty of customers that have perceptual vigilance which is the stage of being screening information that is relevant. On perception process, customers express their own final perception using their consuming behaviour.