Cb 1 models of consumer behaviour
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Transcript of Cb 1 models of consumer behaviour
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� Human behaviour is guided by the search for pleasure
� Given by Jeremy Bentham (1789)
� Motive Force:
› “Maximum Pleasure with minimum effort”
� Gives rise to material culture
› Earning and spending of money
� People buy because of
› Beauty, Fun, Sensational Experiences, Thrill
� Concept of Marginal Utility
› Based indirectly on hedonism
› Maximize consumption between choices till marginal utilities are
same across products
› Forms the basis of Economic Analysis
› Two Main Approaches
� Ordinal Utility Approach
� Revealed Preference Approach
› Lead to Macro-Economic Analysis of J.M. Keynes
� Consumption Function and Aggregate Demand
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� Propounded by George Katona in 1963
� Consumers are Economic Agents; however they are
influenced by other forces:
› Social
› Political
› Psychological
� Katona believed that Psychological factors can
mitigate the impact of economic factors
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� Macro Economic Condition
› GDP, Employment, Inflation
� Macro Economic Variables
› Taxes, Subsidies, Credit Policy, Other Rates of Interest
� Personal Traits
› Motivation, Attitude, Aptitude, Perception, Expectation,
Knowledge
› Use of these in Personal Decision Making
� Katona Believed that:
› “The consumer, based on his personality traits, behaves as per
the macro conditions and variables”
Actual Economic
ConditionsPsychological
Process
Consumer
Sentiments
Economic
Behaviour
� Merits
› The first model to explicitly state that psychological processes
are important
� Demerits
› Micro and Macro Framework have been mixed without
highlighting the roles they play
› Does not explain purchase decisions
› Taste and Preferences are unaccounted for
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� Propounded by Francesco Nicosia in 1966
� Assumes that
› Consumer seeks to realise well defined goals
› Consumer has no predisposition towards firms – either positive or
negative
� Constitutes of Four Fields
› Firm and Consumer Traits
› Consumer Search and Evaluation
› Act of Purchase
› Feedback
Subfield One:
Firms Attributes
Subfield Two:
Consumer Attributes
Including Predisposition
Message
ExposureAttitude
Search
&
Evaluation
Motivation
Action
Actual
Purchase
Consumption /
Storage
Experience
Field 4: Feedback
Field 3: Purchase
Fie
ld 2
: Se
arc
h a
nd
Eva
lua
tio
n
Field 1: Firm and Consumer
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� Merits
› Brief and quite and general
› Firms communicate to Consumers
› Consumers deliberate activate the decision making process
› It contributed to the funnel approach
� Demerits
› Not much detail explanation of the internal factors
› Assumes demand is generated due to communication
› Lumps all types of communication – informative and persuasive
– into single category
� Promulgated by John A. Howard & Jagdish N Seth in 1969
� Assumes the following:› Consumers have incomplete information about market
conditions
› Consumers have limited ability to understand and analyse the conditions that confront them
› The objective of the consumer is a rational choice of brand from those that are available and they know about
� Three (3) types of Response Behaviour› Extensive Problem Solving (EPS)
› Limited Problem Solving (LPS)
› Routine Response Behaviour (RRB)
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� Merits
› It recognizes the influence of unsatisfactory experiential learning
on future purchase decisions.
› The entire process of search & evaluation will be repeated
again and again until the consumer gets the satisfaction.
› Consumer are incessantly exposed to information.
� Demerits:
› It does not discuss the influence of unsatisfactory experience
gained from the purchase.
› It over looks the dynamics of an oligopoly market competition.
› Model does not offer any method to measure variables/
parameters
› It leaves out unbranded products
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� All the models are based on the process rather than the
cause and consequence of a decision
� They do not formulate a crisp and well articulated
theory as to why do consumers purchase more of one
than the other goods?
� Models are descriptive rather than being analytical
� Howard and Seth model is the most realistic one
� Managerial models have attempted to bring in realism
as compared to economic models
� Propounded by James F Engel, David T Kollat & Roger D
Blackwell in 1968
� Underwent extensive revision and is currently known as
the Engel-Blackwell-Miniard Model (1990)
� Will be studied in detail in the Consumer Behaviour
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