cb unit-ii (models in consumer behavior)

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By :

Prof. Amit Kumar

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Course: Consumer Behavior

Unit-1 Consumer in the Marketplace

Unit-2 Models of Consumer Behavior

Unit-3 Cultural Influences on Consumer Decision making

Unit-4 Sociological Influences on Consumer Decision making

Unit-5 Personal / Individual Influences on Decision making

Unit-6 Psychological Influences on Decision making

Unit-7 Consumer Decision Making Process

Unit-8 Consumer Influence & Diffusion of Innovation

Consumer Behavior

IILM-Graduate School of Management

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Consumer Behavior Models of Consumer Behavior


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Models

• Economic Model• Psychological Model• Black-Box Model• Learning Model / S-R-Model• Sociological Model• Howard-Sheth Model• Nicosa Model• Webster & Wind Model• Engel- Kollat Blackwell Model



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Models

Economic Model:• Under 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 the product/service which gives him/her maximum satisfaction (utility).

• Consumers are assumed to follow the principle of maximum utility based on the law of diminishing marginal utility.

• It is assumed that with limited purchasing power, and a set of needs and tastes, a consumer will allocate his/her expenditure over different products at given prices so as to maximize utility.

• Economic model of CB is unidimensional.This means that buying decisions of a person are governed by the concept of utility.



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Models

Economic Model:Economic model is based on certain predictions of buying behavior.

1. Price Effect- Lesser the price of the product, more will be the quantity purchased.

2. Substitution Effect- Lesser the price of the substitute product, lesser will be the quantity of the original product bought.

3. Income Effect- More the purchasing power, more will be the quantity purchased.

“The assumption about the rational behavior of human beings have been challenged by the behavioral scientists. They are of the opinion that while the predictions are useful, the model only explains how a consumer ought to behave. It does not throw light on how does the consumer actually behave.”



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Models

Economic Model: Law of Diminishing Marginal Utility • The basic principle that explain the way consumers choose a certain

combination of goods and services is called the law of diminishing marginal utility. It has been observed that an individual’s ability to enjoy the usage of a good reduces as he consumes more of that product.

• For example, when a person is hungry, consuming a slice of bread will provide him with a great amount of utility (satisfaction). A second slice of bread will help in reducing the gap between hunger and feeling of satisfaction. In this way the person will consume more slices of bread till his hunger is fully satisfied and any additional intake of bread will only result in dissatisfaction.



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Models

Economic Model: Law of Diminishing Marginal Utility • Thus, we can say that as the number or quantity of a good consumed

increases, the total utility gained by the increase in that quantity increase at a decreasing rate. Then we can define marginal utility as that extra bit of utility provided by consuming one more unit of good.

Quantity of good Total utility Marginal utility(bread) consumed (units Consumed) (units)

0 0 -1 10 102 18 83 24 64 28 45 30 26 30 0



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Model of Consumer Behavior

Black Box Model of Consumer Behavior

+WOM

ConsumerPsychology



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Complete model of consumer behavior

Engel- Kollat Blackwell Model

Stimuli (marketer dominated, other)

External search

Memory

Internal search

Exposure

Attention

Comprehension

Acceptance

Retention

Search

Need recognition

Alternative evaluation

Purchase

Outcomes

Dissatisfaction Satisfaction

Individual differences• resources• motivation & involvement• knowledge• attitudes• personality, values, lifestyle

Influences• culture• social class• family• situation

Start



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Models

Nicosia Model:• In the recent years marketing scholars have build buyer behavior model

taking the marketing man’s point of view. It is also said to be a system model, because the human being is analyzed as a system, with stimuli as the input to the system and human behavior as an output of the system.

• This model was developed in 1966, by Francesco Nicosia, an expert in consumer motivation and behavior.

• The Nicosia model tries to explain buyer behavior by establishing a link between the organization and its (prospective) consumer.



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Models

Webster and Wind Model:• This is a complex model developed by F.E Webster and Y.Wind, as an

attempt to explain multifaceted nature of organizational buying behavior. This model refers to the Environmental, Organizational and Individual buying determinants which influences organizational buyers.

• Environmental determinants comprise of physical & technological factors, economic, political, legal and socio-cultural. These are external factors which cannot be controlled but understanding of same is crucial to succeed.

• Organizational determinants is based on four elements namely people, technology, structure and task.

• Individual participants are Users, Influencers, Buyers, Deciders and Gate Keepers.



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Howard & Sheth Model

• John Howard and Jagdish Sheth presented their buyer model in 1969.

• It is an integrated model. It assumes problem solving approach in buying and adopts input-output or system approach in buying.

• Howard introduced learning process in buying. Satisfaction leads brand loyalty. Discontentment creates brand switching by the buyers. It other words , the logic of this model that there are inputs in the form of stimuli. There are output beginning with attention to a given stimulus and ending the purchase.

• In between these inputs and outputs , there are variable affecting perception and learning. These variables are “hypothetical” as they can not be directly measured at the time of occurrence.



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Howard & Sheth Model

• Inputs (stimuli)

– significativeThe 'real' (physical) aspects of the product or service

– symbolicThe ideas or images attached by the supplier

– socialThe ideas or images attached to the product by society, such as reference groups.

• Outputs

– The consumers actions

• Constructs

– perceptualObtaining and handling information about the product or service.

– learningThe process of learning leading to the decision itself



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Howard & Sheth Model:



cb unit-ii (models in consumer behavior)

Leadership & Management