Models of Consumer Behaviour

Week 2 Consumer Behaviour and Food Marketing

Models of Consumer Behaviour
• Types of consumption • Purchase paradigms • Modelling food consumption behaviour
“Human responses in a commercial world” (East, chapter 1)

What determines food choice?
• Prices + Income + Preferences • There are three types of influences on preference and choices for food:
– Characteristics of the product – Characteristics of the individual – Characteristics of the environment

Types of consumption
• • • • Important purchases (relevance) Repetitive consumption (frequency) Involuntary consumption (freedom) Group consumption (susceptibility to social influence)

Important purchases
• Product purchased for the first time • Infrequently purchased products
– Time and effort to choose – Little experience – High involvement

Going to a new restaurant Choosing the menu for an important dinner

Repetitive consumption
• • • • • Frequent purchase Low price (or standard quality/variability?) Little conscious attention Low involvement Experience goods
Salt at the supermarket

Involuntary consumption
• Unavoidable consumption
– – – – Petrol for the car Telephone Repair of roads (social form, public goods) …

• Choice between brands? Tap water

Group consumption
• Purchase based on some group influence process
– Family expenditures – Company purchases

Mineral water

Purchase paradigms, theories and models
Paradigm (perspective, framework) Theory

MODEL

Why do we need Consumer Behaviour theories, paradigms and models?
• To support marketing practices as:
– Use of pricing incentives
• Impact on sales • Reaction after the end of price cuts • Understanding reasons behind consumer behaviour

– Advertising
• Impact on sales (or loyalty or brand recognition) • Duration of effects • Underlying mechanisms

– Brand extension
• Impact on the new product • Impact on the old product • Why?

Example: price cuts
• During promotion: sales (quantity) up by 50% • After promotion: sales at same level as before • Why?
– % of new purchasers – Perception low prices as low quality

Purchase paradigms
• Are not mutually exclusive • Subjective preferences • Appropriateness for particular conditions

Purchase paradigms
1. Cognitive paradigm (US)
– Purchase as the outcome of problem-solving

2. Reinforcement paradigm (UK)
– Purchase as learned behaviour

3. Habit paradigm
– Pre-established pattern of behaviour

The Cognitive paradigm
• Decision-making as an explanation for consumer behaviour
“The cognitive consumer is credited with the capacity to receive and handle considerable quantities of information, to engage actively in the comparative evaluation of alternative products and brands, and to select rationally among them” [Foxall]

Cognitive paradigm
• Does it work? • Typical purchase (especially for food)
– Few alternatives – Little external search – Few evaluative criteria

• Engel, Blackwell and Miniard (1995)

Extended Problem Solving
• New and important purchases
Problem/need recognition Search for information

Evaluation of alternatives
Purchase

Consumption
Post-consumption evaluation

Limited problem solving
• Even in new purchase there are no time, resource and motivation to the search • Search for information and evaluation of alternatives are limited

Habitual decision-making
• Loyalty to the brand • Inertia
– The need is satisfied, but there is no special interest in the product

• Food products • “Satisficing behaviour”
Accept the first solution that is good enough to satisfy your need, even if a better solution may be missed

Satisficing behaviour (Simon, 1957; Klein, 1989)
Need recognition

Evaluation of single Option NO

Purchase?
YES END

The Reinforcement paradigm (Learning Theory)
• Reinforcer: an experience which raises the frequency of “responses” associated with it • Punisher: an experience which reduces the frequency of such response [Skinner, 1938; 1953]

The learned behaviour theory
• Past behaviour teaches us, and after learning we can modify later behaviour
– Satisfaction/unsatisfaction with a product – It is a valid theory both under the reinforcement and habit paradigm

Some types of learning
• Classic conditioning (Pavlov’s dog) • Watson and Rayner “Little Albert” (1920): rats, iron bars and the “generalising effect” • Learning is generalised
– Brand extension: use of an existing brand for a new product – Use of stimuli: packaging, brand names, colours, smells, music, context of purchase/consumption

• Reinforcement learning
– Trial and error learning – Shaping (behaviour changed by reinforcing the performances that show change in a desired direction)

Classical conditioning
• Signs and colour coding (e.g. mailbox)

The satiation effect
• Heavily used reinforcements lose power (satiation effect)
– Wearout in advertisement – Desensitisation: stimulus satiation

Stimuli and reinforcement learning
• Continuous and Intermittent learning
– Continuous is quicker – Intermittent has a larger final effect – Extinction period after the end of reinforcement is longer for intermittent learning

• Example of reinforcers: Kinder egg surprise, “air miles”, Tesco clubcard point, cashback

Punishment and reinforcement learning
• Food poisoning consequences
– One failure is enough – Undiscovered later improvements of the product – Effect is long-lasting

Reinforcement and marketing strategy
• Control stimuli to “direct” behaviour • Reinforcers
– Pleasure – Information

• Degree of “opennes” (range of activities available to the consumer) • Environment affects behaviour

The Habit paradigm
• While the cognitive and reinforcement paradigms are based on dynamics and change, the habit one is related to aggregate stable markets, where behaviour is seen as relatively unchanging. • The habit paradigm excludes problem-solving or planning • Judgment comes after purchase and habits may be broken

The involvement factor
• Involvement
– Importance of purchase – Risks involved
• Potential costs • Irreversibility of the decision

– Type of cognitive process that is generated
Example: beef consumption after the BSE crisis

Frustration factor
• Frustration as “blocked motivation” • No options are available • Minor frustrations in using products may lead to change products • New products should be designed to avoid frustration

Managerial control and the purchase paradigms
• Cognitive paradigm
– Provide information and persuasion – Suitable for one-off decisions

• Reinforcement paradigm
– Change the environment and stimuli

• Habit paradigm
– Packaging – Advertising

Problem/need recognition
• In general, individuals recognise they have a need for something when there is a discrepancy between their actual state and ideal state.

Need recognition and marketing strategy
• Advertising • In-store promotion • Visibility

Need recognition…

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