Consumer Behaviour can be defined as the behaviourthat consumers display in searching for, purchasing, evaluating, and disposing of products and services that they expect will satisfy their needs.

Focuses on how individuals make decisions to spend their available resources on consumption

The 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.

Models of consumer behavior

Traditional models:

Economic Model

Learning Model

Psychoanalytic Model

Sociological Model

Contemporary models

Horward Sheth model

Nicosia

Webster and Wind

Engel, Blackwell and Minard model

Economic Model

Synthesized by Alfred Marshall based on the Theory of

Marginal Utility and Micro-Economic Theory.

The Focus is on the “Act of Purchase” of an “Average

Consumer”.

Explains “What” a Consumer would purchase and “In

What Quantity”.

This model assumes that with limited purchasing power

and a set of needs and tastes, a consumer will allocate his/

her expenditure over different products at a given prices so

as to maximize utility.

Basic Assumptions

Individual needs are unlimited

Individual needs cannot be fully satisfied

Individual is completely aware of his needs

Individual is a rational buyer

Individual has the perfect information about the utility of

products available in the market

The utility of a product or service gets reduced with each

subsequent purchase

Price of goods are the sole sacrifice involved in obtaining

a product or service

Market is a collection of homogeneous individuals

Criticism to Economic Model

Economic Models ignores the effect of

• Perception

• Attitude

• Motivation

• Personality

• Learning Process

• Social Class

• Culture

Learning model

This model help marketers to promote association of products with strong drivers and cues, which would lead to positive reinforcement from the consumers.

In marketing context, ‘learning’ will help marketers to understand how consumer learn to respond in new marketing situations, or how they have learned and respond in the past in similar situations.

As Consumers also learn to discriminate and this information will be useful in working out different marketing strategies.

Psychoanalytical Model of Consumer

BehaviourPsychoanalytic theory is attributed to the work of

eminent psychologist Sigmund Freud.

Introduced personality as a motivating force in human behaviour .

This model is concerned with personality and says that human behaviour to a great extent is directed by a complex set of deep seated motives.

Mental framework of a human being is composed of three elements • The Id• The Superego• The Ego

Contd………..

Id is what an individual is born with.

Super-ego are formed out of the values

Ego acts as a balance between the Id and the

Super-ego

Id remains at the core of each need

Individuals show behaviour as a gratification to

their Id

Criticism to Psychoanalytical Model

All the behaviours cannot be attributed to satisfaction of

Id.

This model views consumers as individuals with minimal

influence of the family, society, reference groups, or

other social and group influences.

Values of individual are liable to change over a period of

time through changes created in perception, learning,

attitude building which this model ignores.

Sociological Model

As per this model, an individual buyer is a part of the institution called society, gets influenced by it and in turn, also influences it in its path of development.

The interactions with all the set of society leave some impressions on him and may play a role in influencing his buying behaviour.

The marketers, through a process of market segmentation can work out on the common behaviour patterns of a specific class and group of buyers and try to influence their buying pattern.

Family, friends and close associates exert the maximum influence

Opinion Leader influences the life-style and buying behaviour of an individual

The Howard Sheth Model of buying

behaviourIt attempts to throw light on the rational brand behaviour shown by buyers when faced with situations involving incomplete information and limited abilities.

The model refers to three levels of decision making:

Extensive problem solving

Limited problem solving

Routinized response behaviour

The model has borrowed the learning theory concepts to explain brand choice behaviour when learning takes places as the buyer moves from extensive to routinized problem solving behaviour.

Four components involved in the

model:

Input variables

Output variables

Hypothetic constructs

Exogenous variables

The model makes significant contribution to

understand consumer behaviour by identifying

the variables which influence consumers.

Input Variables: these variables acts as stimuli in the

environment.

Stimuli can be of Significative, Symbolic & Social

Significative stimuli are those actual elements of brands

which the buyer confronts, where as Symbolic stimuli are

those which are used by marketers to represent their

products in a symbolic form. Social stimuli are generated

by the social environment such as family, friends, groups

etc.

Output variables: These are which buyer’s observable responses to stimulus

inputs. They appear in the sequence as below:

Attention: Based on the importance of the buyer’s

information intake.

Comprehension: the store of information the buyer has

about the brand.

Attitude: the buyer’s evaluation of the particular brand's

potential to satisfy his or her motives.

Intention: the brand which the buyer intends to buy.

Purchase behaviour: the act of actually purchasing,

which reflects the buyer’s predisposition to buy as

modified by any of the inhibitors.

Hypothetical Constructs:The model proposes a number of intervening variables which

have been categorised into two major groups: perceptual and

learning constructs.

Perceptual Constructs include:

Sensitivity to information: the degree to which the buyer

regulates the stimulus information flow.

Perceptual bias: refers to distorting or altering information

Search for information: it involves actively seeking

information on the brands or their characteristics.

The buyer’s learning constructs can be defined as:

Motives are general or specific goals impelling action.

Brand potential of the evoked set refer to the buyer’s perception on the ability of brands in his pr her evoked set to satisfy his or her goals.

Decision mediators are based on the motives. The buyer will have certain mental rules for matching and ranking the purchase alternatives.

Predisposition refers to a preference towards brand in the evoked set which expresses an attitude towards them.

Inhibitors refers to environmental forces like price and time pressure which may inhibit or put restrain on the purchase of a preferred brand.

Satisfaction the extent to which, post actual purchase will measure upto the buyer’s expectation of it.

Exogenous variables:

These are list of a number of external variables

(external to the buyer) which can significantly

influence buyer decisions.

The Howard Sheth Model of buying

behaviour

Limitations of the model:

There is a absence of sharp distinctions between

exogenous variables and other variables.

Some of the variables, which are not well

defined, and are difficult to measure too.

The model is quite complex and not very easy

to comprehend.

The Nicosia Model

Proposed by Francesco Nicosia in 1970s

This model attempts to explain buying behaviour by establishing a link

between the organisation and its prospective customer. It analyse

human being as a system with stimuli as the input to the system and the

human behaviour as an output of the system.

The model suggests that message from the first influences the

predisposition of the consumer towards the product or services. Based

on the situation, the consumer will have a certain attitude towards the

product. This may result in a search for the product or an evaluation of

the product attributes by the consumer.

If the customer satisfies with above it may result in a positive response,

with a decision to buy the product otherwise the reverse may occur.

The Nicosia Model explains in 4 basic areas:

Field 1:- the consumer attribute and the firm’s attributes. The advt. message sent from the company will reach the consumer attributes.

Field 2:- it is related to the search and evaluation, undertaken by the consumer, of the advertised product and also to verify if other alternatives are variable.

If the process results in motivation to buy, it becomes the input for Field 3

Field 3:- it explains how the consumer actually buys the product.Transformation of the motivation into the act of buying

Field 4:- it is related to the uses of the purchased

items. It can also be related to an output to receive

feedback on sales results by organisation.

The Nicosia Model

Limitations:

The flow is not completed and does not mention the various

factors internal to the consumer.

The assumption about the consumer being involved in the

decision process with no predisposition about the various

brands is restricting.

Overlapping between firm’s attributes and consumers

attributes.

Webster and wind

partitiones the buying process into several processes

processes of decision-making are determined by environmental and organizational factors.

Final buying process rendered as the mixture of individual and group decision

example

Automobile manufacturing

• B2B business

• Purchasing tires

Engel, Blackwell and Minirad (EBM)

Model: It shares certain things with Howard-Sheth model.

The core of the EBM model is a decision process which is

augmented with inputs from information processing and

other influencing factors.

Four sections of the Model:

• Input

• Information Processing

• Decision process and

• Variables influencing decision process.

Contd……….

Information Input : consumer gets

information from marketing and non-

marketing sources

Information Processing : consists of the

consumer’s exposure, attention, perception,

acceptance, and retention of incoming

information.

Contd………..

Decision Process : Problem recognition,

search for alternatives, alternate evaluation

purchase, and outcomes. The central focus

of the model.

Variables influencing the decision process :

consists of individual and environmental

influences that affect all five stages of the

decision process.

APPLICATIONS OF CONSUMER

BEHAVIOUR

Improve marketing strategies by understanding

issues such as how:

• The psychology of how consumers think, feel, reason, and select

between different alternatives(e.g., brands, products)

• The psychology of how the consumer is influenced by his or her

environment (e.g., culture, family, signs, media);

• The behaviour of consumers while shopping or making other

marketing decisions;

• Limitations in consumer knowledge or information

processing abilities influence decisions and marketing

outcome;

• How consumer motivation and decision strategies differ

between products that differ in their level of importance

or interest that they entail for the consumer; and

• How marketers can adapt and improve their marketing

campaigns and marketing strategies to more effectively

reach the consumer.

There are four main applications of

consumer behavior:1. MARKETING STRATEGY—i.e., for making better

marketing campaigns.

For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon.

(1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and

(2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices.

2. PUBLIC POLICY.

e.g

In the 1980s, Accutane, a near miracle cure for acne, was introduced.

Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women.

To get consumers’ attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers.

3. SOCIAL MARKETING - Application of marketing strategies and tactics to alter or create behaviors that have a positive effect on targeted individuals or society as a whole. i.e.

involves getting ideas across to consumers rather than selling something

e.g. A marketing professor, went on sabbatical to work for the Centres for Disease

Control trying to reduce the incidence of transmission of diseases through illegal drug use.

The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible.

As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic.

4. MAKING US BETTER CONSUMERS

for example, that if we buy a 64 liquid ounce bottle of laundry

detergent, you should pay less per ounce than if we bought two 32

ounce bottles.

In practice, however, we often pay a size premium by buying the

larger quantity.

In other words, in this case, knowing this fact will sensitize us to

the need to check the unit cost labels to determine if we

are really getting a bargain.

In case of Health Drinks such as Protein Shakes there is the system

that the bulk you buy, the Cheaper it gets

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