CB Intro Models

8/12/2019 CB Intro Models

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Consumer Behaviour [email protected]

CONSUMER BEHAVIOUR

A customer is the most important visitor on our premises. He is not dependent on us.We are dependent on him. He is not an interruption on our work. He is the purpose of it

and not an outsider on our premises. He is a part of it. We are not doing him a favour by

serving him. He is doing us a favour by giving us the opportunity to do so.

! Mahatma Gandhi

Customer Vs Consumer

"he term #customer$ and #consumer$ have been used synonymously most of thetime. "he term customer refers to the purchaser of a product or service whereas the term

consumer refers to the end user of a product or service. "he customer may or may not be

a consumer. %imilarly the consumer may or may not be the customer.

Definitions

Consumer behaviour is defined as activities people undertake when obtaining&

consuming& and disposing of products and services.

- Roger D. Blackwell, Paul W. Miniard and James F. Engel

%imply it can be stated that consumer behaviour is the study of why people buy.

Consumer behaviour has been referred to as the psychological& social and physical

behaviour of all potential consumers as they become aware of& evaluate& purchase andconsume and tell others about products and services.

- u!a R. "air

Obtaining: refers to the activities involved in purchase of a product. "he activities

include searching for information regarding product features& evaluating the alternatives&

and purchasing. 't also includes the place of purchase (shopping malls)nearest grocerystores*& the mode of purchase (cash)credit card*& etc.

Consuming:refers to how& where& when and under what circumstances consumers use

products. How + as side dish or main dish, Where + place (home& office or restaurant*&When + time (morning or afternoon or evening* and under what circumstances (happiest

moments or with friends or when alone*.

Disposing:refers to how they get rid of products and packaging. Whether they resell it

or give it to children or use it for different purpose.

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there are changes occurring in the personal& social and influences making consumer more

individualistic& conscious (about the products or services to fulfill their needs*. %o& the

study of consumer behaviour will help marketers to assess the consumers$ needs andwants& and make better strategic marketing decisions.

Stu%ents: As students of marketing& one will be more concerned with the study ofconsumer behaviour. %uch a study will help to gauge into the consumer$s mind and

understand the various consumption related aspects of individuals (consumers*. As

students of marketing& understanding of consumer behaviour will make the study of#marketing management$ more interesting& understandable and increase awareness of its

practical implications.

Dee&opment of Consumer Behaiour as a 'ie&% of Stu%(

Consumer behaviour as a separate field of study gained attention from the /9:;s.

'n the absence of a history or a separate research of its own& this new discipline drew)orborrowed concepts from other scientific disciplines such as +


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Consumer Behaiour an% Mar$eting

Broadly& buyers can be classified into two ma>or categories0

Consumers (in the household sector& who buy goods or services for personal

consumption* 'ndustrial buyers (who purchase goods and services for carrying out activities in

the various industrial units*.

'n this age of information e7plosion& and internet marketing becoming a reality& it

is all the more necessary that they (marketers* go for the creation of appropriate database

which can help them to go for #tailor made$ products to suit individual tastes& preferences

and buying behaviour.

"he industrial or organi3ational markets consist of buyers who buy goods and

services needed in the process of furthering their industrial and institutionlal activities.

"he behavioural differences between the domestic consumers and industrial buyers canbe done on the basis of the ultimate ob>ective sought by them. While the domestic

consumers seek need satisfaction and value added by the purchase of the product& theindustrial buyers seek profit or measurement of improved operational efficiency. "he

latter$s behaviour& thus& will be influenced by the ob>ectives of the organi3ation they

serve. Accordingly there is also a difference in the buying process adopted by both thedomestic consumer and industrial buyer.

A ma>or implication of the differences in the consumer and industrial behaviour

for marketers is the relative emphasis to be placed on the various marketing mi7es to beadopted by the concerned marketer. nderstanding of the consumer behaviour will

enable marketers to design effective marketing strategy and programmes.

Consumer Mo%e&&ing

Mo%e&: A physical& visual or mathematical .. %implified representation of a comple7

system.

A model is very often referred to as an abstract representation of a process orrelationship. We (human beings* hold various models in our minds which allow us to

make sense of the world and also help to predict the likely course of events. %imply

stated models help us in the following way0

"hey help in the development of theories

"hey help to understand comple7 relationships"hey provide the framework for discussions and research work

"he primary concern is to use the models to understand consumer behaviour.

Consumer behaviourists as well as marketers are interested in understanding how and

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why certain decisions are made. "he discussions have been about some of the important

models of consumer behaviour& which attempts to give a comprehensive view of all those

aspects of the buying situations which are deemed to be significant by their creators.

Mo%e&s of Consumer Behaiour

E*onomi* Mo%e&

nder economics& it is assumed that man is a rational human being& who will

evaluate all the alternatives in terms of cost and value received and select that

product)service which gives him)her ma7imum satisfaction (utility*. Consumers are

assumed to follow the principle of ma7imum utility based on the law of diminishingmarginal utility. 't is assumed that with limited purchasing power& and a set of needs and

tastes& a consumer will allocate his)her e7penditure over different products at given prices

so as to ma7imi3e utility. Being a rational creature man will make his purchase decisions

with the intention of ma7imi3ing the utility)benefits.

=conomic model is based on certain predictions of buying behaviour

i. sser the price of the product& more will be the 2uantity purchased ($rice e))ect*

ii. esser the price of substitute& lesser will be 2uantity of the original productbought (su+stitution e))ect*

iii. 4ore the purchasing power& more will be the 2uantity purchased (income e))ect*

+earning Mo%e&

nlike the economists& classical psychologists have been interested in the

formation and satisfaction of needs and tastes. "hey argued that living beings wereinfluenced by both innate needs such as the primary needs of hunger& thirst& se7& shelter

and learned needs like fear D guilt. A drive (internal stimulus* which when directed

towards a drive reducing ob>ect becomes a motive. "he various products or services willact as a stimuli to satisfy drives. Eor instance& a hungry person will be driven towards

food& which after consumption will reduce the drive and provide satisfaction. According

to learning theorists& this response of satisfaction (feeling* reinforces the relationship

between drive and the drive reducing stimulus ob>ect as well as the related cues. Eurther&when consumers learn to associate connection between stimulus and response& it becomes

a habit. "here are certain cognitive theorists& who have advocated that human beings not

only learn to link stimulus with response (%!F* but also results in the formation of othercognitive processes such as attitudes& values& beliefs& motivation etc.

'n marketing conte7t& #learning$ help marketers to understand how consumerslearn to respond in new marketing situations& or how they have learned and responded in

the past in similar situations. ery often it is observed that consumer$s e7perience with

one product from a firm is likely to be generali3ed to the other products of the firm.

Conversely& consumers also learn to discriminate and this information will be useful in



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working out different marketing strategies. %imply stated this learning model will help

markters to promote associations of products with strong drives and cues and positive re!

inforcements.

)s(*hoana&(ti* Mo%e&

"his model is based on the work of psychologists who were concerned with

personality. "hey were of the view that human needs and motives operated at the

conscious as well as subconscious levels. "his theory was developed by %igmund Ereud.According to him human behaviour (personality* is the outcome of

(a* #id$ + the source of all psychic energy which drives us as action

(b* #super ego$ + the internal representation of what is approved by the society(c* #ego$ + the conscious directing #id$ impulses to find gratification in a socially

accepted manner. "hus& we can say that human behaviour is directed by a

comple7 set of deep seated motives.

Erom marketing point of view this means that buyers will be influenced by

symbolic factors in buying product. 4otivational research has been involved ininvestigating motives of consumer behaviour so as to develop suitable marketing

implications accordingly. 4arketers have been using this approach to generate ideas for

developing product + design& features& advertising and other promotional techni2ues.

So*io&ogi*a& Mo%e&

According to this model the individual buyer is a part of the institution calledsociety. %ince he is living in a society& he gets influenced by it and in turn also influences

it in its path of development. He is playing many roles as a part of various formal and

informal associations or organi3ations i.e.& as a family member& as an employee of a firm&as a member of a professional forum and as an active member of an informal cultural

organi3ation. %uch interactions leave some impressions on him and may play a role in

influencing his buying behaviour.

'ntimate groups comprising of family& friend and close colleagues e7ercise a

strong influence on the life style and the buying behaviour of an individual member. "he

peer group plays a very important role in acting as an influencing factor especially inadopting particular life styles and buying behaviour patterns. "he group generally has an

informal opinion leader& whose views are respected by the group. "his leader is able to

influence the members life style and buying decisions. "he marketers through a processof market segmentation can work out on the common behaviour patterns of a specific

class and group buyers and try to influence their buying pattern.

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,he Ho-ar% Sheth Mo%e& of Bu(ing Behaiour

"his model basically serves two purposes0

i. 't indicates how comple7 the whole 2uestion of consumer behaviour really is.

ii. 't provides the frame work for including various concepts like learning&perception& attitudes etc.& which play a role in influencing consumer

behaviour.

Inputs: 'n the Howard + %heth theory& the most significant stimulus affecting the buying

behaviour are the information cues about the characteristics of the product. "hese cues

may be signi)icati%eif it comes to the buyer from the product itself when he is involved

in a shopping activity. A similar set of cues& which are sm+olicin nature may also act asinformation sources.

Both these significative and symbolic information cues represent the firms marketing

efforts. "he product or broad characteristics acting as information cues are 2uality& price&distinctiveness& service and availability. "here are impersonal sources like mass media

communication and advertising& over which the firm has no control. However& theinformation sources also include sales and service personnel who can add and help the

marketing efforts of the firm. "he third source is social informationcues which could

affect buying behaviour towards the product or brand and these include family& friends orother members of the groups with whom buyer comes into contact or to which he aspires

to be in. "his social source is personal and the company)marketer has no control over

this source.

)ersona& .So*ia&/ Impersona&

Commer*ia& (a* %alesmen(b* %ervice personnel (a*


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+earning Constru*ts

"he second set of hypothetical constructs in this theory are more comple7 andnumerous. #4otives$ refers to the goals the individual attempts to achieve through

his)her buying behaviour. "hese goals are derived from the various drives (needs* which

may be acting as a cue for his)her motive.

4ore closely related to the buyers intention is his attitude towards the

product)brand. Whether he)she has formed a positive attitude and if not will there be achange in the attitude etc.& are some of the factors which may affect the attitude an

individual has towards the product)brand.

6ther learning constructs include #brand comprehension$ i.e.&knowledge)awareness about the brand characteristic features that forms the basis for the

buyers evoked set of alternatives, choice criteria& and the confidence the individual has

about his)her brand comprehensions& attitudes or intentions. Einally& the model includes a

construct& #satisfaction$. "his refers to feedback mechanism& i.e.& the post purchase andpost use evaluation of the output of the process.

E0ogeneous Variab&es:

"his theory also includes a number of variables which are not e7plained but havea bearing on some or all of the constructs discussed above and indirectly influences the

output or consumer response.

i1 So*ia& an% Organisationa& Setting:4an is basically a social animal. Because of hisinteractions with various groups and society& they look to each other for guidance

regarding what to buy& how to buy)dress etc.

ii1 So*ia& *&ass: 'n order to conform to the norms of the social class to which he)she

belongs& the individual will be engaged in a behaviour which will be acceptable to the

social class to which he belongs.

iii1 Cu&ture:refers to the shared& somewhat consistent pattern of behaviour of a group of

people. =ach culture has a set of beliefs& values& etc. %o the pattern of buyer behaviour

will be based on a pattern of behaviour shared in a specific subset of larger culture + asubculture trait.

i1 )ur*hasing po-er2'inan*ia& status:"he money)income available for purchasinggoods and services during some specified time period also plays a role in influencing the

consumption pattern and thereby his buying behaviour.



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,he Nio*osia Mo%e&

'n the last recent years marketing scholars have build behaviour models taking themarketing man$s point of view. "he 5icosia model is one such buyer behaviour model.

't also is said to be a systems model& because the human being is analysed as a system&

with stimuli as the input to the system and the human behaviour as an output of thesystem.

"his model was developed in /9::& by Erancesco 5icossia& an e7pert in consumermotivation and behaviour. "he 5icossia model tries to e7plain buyer behaviour by

establishing a link between the organi3ation and its (prospective* consumer. "he model

suggests that messages from the firm first influences the predisposition of the consumer

towards the product or service. Based on the situation& the consumer will have a certainattitude towards the product. "his may result in a search for the product or an evaluation

of the product attributes by the consumer. 'f the above step satisfies the consumer& it may

result in a positive response& with a decision to buy the product otherwise the reverse may

occur. "his is in brief about the activity e7planations in the above model.

"he 5icosia model& groups the above activity e7planations into four basic areas +

Eield one has two sub areas + the consumers attribute and the firm$s attributes. "he

advertising message sent from the company will reach the consumer$s attributes.Jepending on the way& the message is received by the consumer& a certain attribute may

develop. "his newly developed attribute becomes the input for Area two.

"he second area or area two + is related to the search and evaluation& undertaken by theconsumer& of the advertised product and also to verify if other alternatives are available.

'n case the above step results in a motivation to buy the product)service& it becomes the

input for third area.

"he third area e7plains how the consumer actually buys the product.

And area four is related to the uses of the purchased items. "his fourth area can also be

used as an output to receive feedback on sales results to the firm.

"ebster an% "in% Mo%e& of Organisationa& Bu(ing Behaiour

"his is a comple7 model developed by E.=. Webster and K. Wind& as an attempt

to e7plain the multifaceted nature of organi3ational buying behaviour. "his model refersto the environmental& organi3ational& interpersonal and individual buying determinants

which influences the organi3ational buyer(s*. "hese determinants influences both the

individual and group decision making processes and conse2uently the final buyingdecisions. "he organi3ational determinant is based on Harold eavitt$s four elements of

organi3ation buying vi3.& people& technology& structure and task.



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An individual engaged in buying for organi3ations may be involved in one or

more of the following buying roles0

Users: "he ultimate users who often initiate the buying process and help in defining

specifications.

Inf&uen*ers:"hey may or may not be directly connected with the decision. But their

views or >udgements of a product or a supplier carry a lot of weightage.

Bu(ers: "hose people who negotiate the purchase.

De*i%ers:"he people who take the actual decision (they may be formal or informal

decision makers*

3ate 4eeper:"he person who regulates the flow of information.

"his model is a valuable contribution and helps in revealing the whole range ofdirect and indirect influences which affect the organi3ational buying behaviour.

However& the limitation is that this model provides a static representation of a dynamicsituation.

,he Enge& ! 4o&&at ! B&a*$-e&& Mo%e&

"his model talks of consumer behaviour as a decision making process in the form

of five step (activities* which occur over a period of time. Apart from these basic core

steps& the model also includes a number of other related variables grouped into fivecategories.

Step 5: )rob&em Re*ognition: "he consumer will recogni3e a difference between his orher actual state and what the ideal state should be. "his may occur on account of an

e7ternal stimuli& for e7ample a young girl has seen an ad of an e7hibition of American

Jiamonds and may feel the desire to possess the same or seeing a beautiful dressdisplayed in the show!room may make a youngster to feel the need for a new dress.

Step 6: Information Sear*h:'nitially the information available with the consumer may

be consistent to the beliefs and attitudes held by him or her. While being involved in aninformation seeking or search stage& the consumer will try to gather more information

from various sources. "hese sources could be sales persons& personal or friends or

neighbours or mass communication media. "he information processing takes place invarious stages. "he individual gets e7posure of the stimuli which may catch his or her

attention& be received and stored or retained in memory. "his method of information

processing is selective in nature and the consumer will accept the information which isconclusive to what is perceived by them.

Step 7: A&ternatie Ea&uation:5ow the individual will evaluate the alternative brands.

"he methods used for evaluating the various products will be dependent on the

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Information )ro*essing

Before information can be used in the rest of the model& the consumer will first be

e7posed to be the information processing. "hat is the consumer must get e7posed to the

information& attend to it& comprehend or understand it& accept it and finally retain it inmemory. Any selective attention or e7posure mechanisms (which may occur in post

purchase dissonance* would operate at this stage.

De*ision )ro*ess:"his process consists of five basic stages0

Nee% Re*ognition:"his acknowledges the fact that there e7ists a problem. "hat is& the

individual is aware that there is a need to be satisfied.

Sear*h: When enough information is available in memory to take a decision& then only

internal search will be re2uired. 'f information is scarce& an e7ternal search for

information is undertaken.

A&ternatie ea&uation:5ow an evaluation of the alternatives found during the search isundertaken. We can see from the model& that this takes into account our attitudes and

beliefs also.

)ur*hase: A purchase is made based on the chosen alternative.

Out*omes: "he outcome can be either positive or negative depending on whether the

purchase satisfies the original perceived need. Jissatisfaction can lead to post!purchasedissonance.

Variab&es Inf&uen*ing De*ision )ro*ess

"his section will consider the individual& social& and situational factors which

influence the decision processes.

"he =B4 model is very fle7ible and more coherent than the Howard %heth model

of consumer behaviour. 't also includes human processes like memory& information

processing and considers both the positive and negative purchase outcomes.

However the model has been critici3ed on two aspects. Eirstly& one the somewhat

vague definition of the role of the influencing variables and secondly& it is felt that theseparation of information search and alternative evaluation is somewhat artificial.

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