Consumer Behaviour

Consumer behaviour models

Janice Denegri Knott

Lecture 2

Room: W435 Email: jdknott@bournemouth.ac.uk

A model a is simplified version of reality, it has never been reality, it isnt reality and it will never be reality...

 therefore all models are subject to criticism

(oh and if we are a bit postmodern, we could ask, what is reality)

Objectives At the end of this session, you should be able to:

Understand the concept of modelling within consumer behaviour studies; Evaluate the applicability of traditional models of consumer behaviour; Evaluate the applicability of contemporary models of consumer behaviour. Understand the main components of the assignment

1. The models hall of fame

Maslows Hierarchy of Needs; Hierarchy of Effects Elaboration Likelihood model Howard-Sheth model Engel, Kollat and Blackwell model Nicosia Model Decision-making models Problem identification models Fishbein and Ajzens Behavioural Intention model Fritz Heider Balance Theory E.Rogers adoption and diffusion of innovations Image congruency theory Information processing

2. Models and theory

Theory: an interrelated set of concepts, definitions and positions that presents a systematic view of phenomenon (Loudon and Della Bitta, 1993) Theory has 4 functions, to:

1. Describe

2. Explain

3. Predict

4. Control

Are all these functions realistic?

3. Types of models Algebraic models:Fishbeins Attitude Model

Ao= =biei
i=1
Ao = the persons overall attitude towards the object bi= the strength of his belief that the object is related to attribute I (e.g. ASDA is good value for money) ei= his evaluation or intensity of feelings (liking or disliking) toward attribute i n= the number of relevant beliefs for that person

3. Types of models Conceptual models: Hierarchy of needs, (Maslow)

3. Types of models Personal variable models: a take on Ajzens Theory of Planned Behaviour (1991)

3. Types of models Comprehensive Models: Howard-Sheth Model

3. Types of models Black Box Models

4. Consumer behaviour models: A brief history

4.1. Traditional Models of consumers

Early models derive from economics and were interested in studying how scarce resources are allocated to quench and unlimited amount of wants and needs (Loudon and Della Bitta, 1993) Macroeconomics Microeconomics

4. Traditional models of consumer behaviour

Focus: Aggregate flows in the economy

ac M

om on ec ro

s ic
Focus: The act of purchasing

1. Microeconomics

4.1. Microeconomics (from Loudon and Della Bitta, 1993)

Concentrates on the act of purchasing Interested in knowing what consumers were purchasing, ignoring the why and how underpinning their behaviour Assumptions made:
Consumers wants and needs are unlimited and unquenchable Consumers allocate their resources to maximise levels of satisfaction (MU1/P1 =MU2/P2 = MUn/Pn) Consumers have perfect knowledge The additional satisfaction of a unit that is bought after the first purchase will be less than the first purchases marginal satisfaction Price is key What are the limitations of this approach? Consumers rational

4.2. Macroeconomics (from Loudon and Della Bitta, 1993)

Looks at the overall economy; the value of goods; from these conclusions are drawn about consumers behaviour influencing these flows Relative income hypothesis: how much is spent it not solely determined by income but is influenced by peers Permanent income hypotheses: consumers determine how much to spend based on a perceived average of what can be consumed and not only on income Consumers behaviour is not taken into account
What are the limitations of this approach?

4.2.1. Behavioural economics (from Loudon and Della Bitta, 1993)

George Katona introduces the need to look at psychological influences guiding consumers behaviour: behavioural economics Consumers will purchase products when they have confidence in the economy (consumer sentiment)

The Katona Model (source: Loudon and Bella Ditta, 1993)

Actual economic conditions

Psychological process

Consumer sentiment

Economic behaviour

Could this model help an organisation in any of its activities?

4.3. Limitations

Is this you? Do you know anybody who thinks like this?

5. Contemporary Models

5.1. Nicosia Model

5.2. Howard-Sheth Model

5.3. Engel-BlackwellKollat

5.1. Nicosia Model (1966)

Field One: From the source of a message to the consumers attitude Field Two: Search for and evaluation of means-end(s) relation(s) (Pre-Action Field)

Sub-field one: Sub-field one: Firms attributes Firms attributes

MESSAGE EXPOSURE

Sub-field two: Sub-field two: Consumers Consumers attributes attributes (pre-dispositions) (pre-dispositions)

ATTITUDE

EXPERIENCE FEEDBACK Consumption Consumption

Field Four: The feedback

Search Search Evaluation Evaluation MOTIVATION

Decision Decision

PURCHASING BEHAVIOUR Could this model help an organisation in any of its activities?

Field Three: The act of purchase

5.1.1. Limitations
Incomplete in a number of aspects, very reductionist Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance:
What type of consumer are we talking about? The company and the consumer have an existing relationship? What type? Is this for a new product? Is this the first exchange the consumer has had with the producer?

The model cannot be validated, according to Foxall (1980) it is prescientific

Do you agree with these? Can you t think of any other limitations?

5.2. Howard-Sheth Model (1969)

Perceptual Constructs Exogenous Variables Outcome

Learning Constructs

Could this model help an organisation in any of its activities?

5.2.1. Limitations
Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance:
Sharp distinctions between exogenous and other variables have not been made The model cannot be generalised, it cannot be applied to co-joint decision making for example Can this model be applied for non-branded products (Rau and Samiee, 1981)?

The model cannot be validated, according to Foxall (1980) it is prescientific Do you agree with these? Can you t think
of any other limitations?

5.3. Engel, Blackwell and Miniard (1990)

Could this model help an organisation in any of its activities?

5.3.1. Limitations
Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined (Rau and Samiee, 1981) The model is vague (Loudon and Della Bitta, 1993)
Key variables are vaguely defined
How do environmental variables affect consumers behaviour? How do motives influence consumers behaviour?

It is a mechanical overview of human behaviour Can this model be applied for non-branded products? Goods? Services? (Rau and Samiee, 1981)

The model cannot be validated, according to Foxall (1980) it is prescientific

Do you agree with these? Can you t think of any other limitations?

6. Conclusions
A model presents phenomena in such a way that it can be easily communicated Models are just representative of reality, they are not reality There are different types of models (black box, conceptual, algebraic, personal variable and comprehensive models) The Nicosia, Howard-Sheth and the Engel, Kollat and Blackwell model have all been criticised on the grounds that they are pre-scientific

6. Conclusions
Models operate on the assumption that all human behaviour is rational All models are mechanistic No model provides genuine insight of what underpins consumer behaviour, is this possible?

Assessment
The proposal (200 words worth 10% of your final grade)
SUBMISSION DATE: MONDAY, 20TH NOVEMBER

A report (2070-2530 words worth 40% of your final grade)

SUBMISSION DATE: MONDAY, 15TH JANUARY

End of year examination, worth 50% of your final grade

Assignments main components

Select a company or not-for-profit organisation that you are familiar with; Evaluate how a specific consumer behaviour theory or model can aid in understanding consumers behaviour and guide marketing/advertising practice.

Assignment guidelines

Consider the options offered in page 10 of your unit guide;

Go over guidelines offered and the assessment criteria

Read lecture notes and accompanying reading in order to select theory or model; Select an organisation that would benefit from your analysis

Conduct an environmental scanning to construct a justification for why there would be a need for your evaluation