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Consumer behaviour models

A model a is simplified version of reality, it has never been reality, it isn’t reality and it will never be reality... are subject to criticism oh and if we are a bit postmodern, we could ask, what is reality … therefore all models

Objectives
At the end of this session, you should be able to  Understand the concept of modelling within consumer behavior 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

The models hall of fame
Maslow’s Hierarchy of Needs; •Hierarchy of Effects •Elaboration Likelihood model • Howard-Shethmodel •Engel, Kollat and Blackwell model • Nicosia Model

Theory has 4 functions.• Decision-making models •Problem identification models •Fishbein and Ajzen’s Behavioural Intention model •Fritz Heider Balance Theory •E.Roger’s adoption and diffusion of innovations •Image congruency theory • Information processing Models and theory Theory: an interrelated set of concepts. definitions and positions that presents a systematic view of phenomenon (Loudon and Della Bitta. to DESCRIBE EXPLAIN PREDEICT CONTROL Are all these functions realistic Types of models Algebraic models:Fishbein’s Attitude Model .

(Maslow) Types of models .Ao= ∑=biei Ao =the person’s overall attitude towards the object bi= the strength of his belief that the object is related to attribute I (e. 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 Types of models Conceptual models: Hierarchy of needs.g.

Personal variable models: a take on Ajzen’s Theory of Planned Behaviour .

Types of models Comprehensive Models: Howard-Sheth Model Types of models Black Box Models .

Consumer behaviour models: A brief history 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 Traditional models of consumer behaviour .

Focus: Aggregate flows in the economy Microeconomics Macroeconomics Focus: The act of purchasing Microeconomics(from Loudon and Della Bitta. Consumers allocate their resources to maximise levels of satisfaction (MU1/P1 =MU2/P2 =… MUn/Pn) 3. Consumers wants and needs are unlimited and unquenchable 2. Consumers have perfect knowledge . 1993)  Concentrates on the act of purchasing  Interested in knowing what consumers were purchasing. ignoring the why and how underpinning their behaviour  Assumptions made 1.

Consumers rational Macroeconomics(from Loudon and Della (from Loudon and DellaBitta Bitta.4.  George Katona introduces the need to look at psychological influences guiding consumer’s behaviour: behavioural economics  Consumers will purchase products when they have confidence in the economy (consumer sentiment . The additional satisfaction of a unit that is bought after the first purchase will be less than the first purchase’s marginal satisfaction 5.  Looks at the overall economy. fromthese conclusions are drawn about consumers’ behavior 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 Behavioural economics(from Loudon and Della (from Loudon and DellaBitta Bitta. 1993) . 1993) . Price is key 6. the value of goods.

The Katona Model Actual economic condition Psychological process Consumer sentiment Economic behaviour .