Models for Consumer Behaviour

What is a Consumer Behaviour (CB) Model

• Buyer behavior refers to an individual's buying

habits based on influences from their background,
education, personal beliefs, goals, needs, desires,
and more.
• A consumer behavior model is a theoretical
framework for explaining why and how customers
make purchasing decisions.
• The goal of consumer behavior models is to
outline a predictable map of customer decisions
up until conversion, thus helping you steer every
stage of the buyer’s journey.
 Why are CB models needed?
• Businesses aim to understand buyer behavior
through customer behavior analysis, which involves
the qualitative and quantitative analysis of a target
market.
• Even though this data can tell you your customer’s
favorite brand, it doesn’t mean much if it doesn’t tell
you why they purchased that brand.
• CB models contextualize results from customer
behavior analysis studies and help you get to the
“why” of purchasing decisions.
• The brand can then create their marketing strategy
to target such customer in an effective way
Models in Consumer Behaviour
Traditional Models
 The Economic Model
• The economic model of consumer behavior is the
most straightforward of the traditional models.
• Consumers try to meet their needs while spending
the least possible resources (money, time, effort
etc.)
• That means that businesses and manufacturers can
predict sales based on their customers’ income and
their products’ price.
• Hence, if companies offer the lowest-priced product,
they may feel that they’re guaranteed a consistent
level of profit.
 Interpretations
• Economic man model is based on:
• Price effect:
– Lesser the price of the product, more will be the
quantity purchased.
• Substitution effect:
– Lesser the price of the substitute product, lesser
will be the utility of the original product bought.
• Income effect:
– When more income is earned, or more money is
available, more will be the quantity purchased.
 Marketing Implications
• It assumes the homogeneity of the market,
similarity of buyer behaviour and concentrates only
on the product or price.
• It ignores all the other aspects such as perception,
motivation, learning, attitudes, personality and
socio-cultural factors.
• It is important to have a multi-disciplinary
approach, as human beings are complex entities
and are influenced by external and internal factors.
• Thus, price is not the only factor influencing
decision-making and the economic model according
to scientists have shortcomings.
 The Learning Model
• This model states that buyer behavior responds
to the desire to satisfy basic needs required for
survival, like food, and learned needs that arise
from lived experiences, like fear or guilt.
• This model takes influence from psychologist
Abraham Maslow’s Hierarchy of Needs
• The Learning Model says that consumers first
make purchases to satisfy their basic needs and
then move on to meet learned needs.
 Interpretation
• The Learning model is based on:
• Drive −
– A strong internal stimulus which compels action.
• Stimuli −
– These are inputs which are capable of arousing drives
or motives.
• Cues −
– It is a sign or signal which acts as a stimulus to a
particular drive.
• Response −
– The way or mode in which an individual reacts to the
stimuli.
 Marketing Implications
• If the response to a given stimulus is
“rewarding”, it reinforces the possibility of
similar response when faced with the same
stimulus or cues.
• With an informational cue like advertising, the
buyer purchases a product (response).
• The favourable experience with the product
increases the probability that the response
would be repeated the next time the need
stimulus arises (reinforcement).
 Psychoanalytic Model
• The psychoanalytical model draws from Sigmund Freud’s
theories and says that individual consumers have deep-
rooted motives, both conscious and unconscious, that
drive them to make a purchase.
• These motives can be hidden fears, suppressed desires,
or personal longing
• Thus, customers make purchases depending on how
stimuli from your business, like an advertisement appeal
to their desires.
• It is important to note that, since these desires can be
unconscious, customers don’t always know why it
appeals to them; they just know it feels right to have it!
 Interpretation
• This model is based on the following:
• Unknown desire
– When customers are presented by a stimuli, an
unknown and often an uncontrollable desire gets
generated in their mind.
– Customers want to fulfil this desire ASAP!
• Sense of achievement
– Upon consumption, it satisfies their want and
more importantly, it gives them a sense of
achievement.
 Marketing Implications
• It is very relevant to businesses that sell an image
that accompanies their products or services.
• Spectacles are generally considered a symbol of
intelligence and smartness.
• Hence, marketers use them in their
communication very effectively to appeal to this
desire when communicating a customer
experience
• This stimuli creates an unknown desire in the
customer’s mind which she wants to fulfil ASAP
 Sociological Model
• This model says that purchases are influenced by an
individual's place within different societal groups:
family, friends, and workgroups, as well as less-
defined groups like Millennials or people who like
yoga.
• An individual will essentially purchase items based on
what is appropriate or typical of the groups they’re
in.
• By doing this, you’re speaking to the consumer in
that specific group and showing them that your
product will help them retain their position in that
group.
 Interpretation
• His model is based on the following:
• Alignment / confirmation to the group
– The tendency is to follow the norms of the group
and do things that are expected from this group.
• Creates a feeling of being in-sync
– Makes the customer feel that she is the part of
that group.
 Marketing Implications
• Clearer the idea about CB, clearer becomes
the communication.
• Clear communication brings efficiency and
better RoI on marketing investments
• It generates trials, improves repeat purchases
an improves customer loyalty
• But, the belief system must be regularly
revisited to ascertain any changes.
Modern Models
 Howard –Sheth Model
• This model shows that CB is complex process
and is highly influenced by the customer’s past
learning, perception and attitudes
• It has four sets of variables
– Input
– Perceptual and learning constructs
– Outputs
– Exogenous or external variables.
 Interpretation
• Levels of Decision making
• Extensive Problem-Solving:
– In this stage, customers know nothing about the
product they’re seeking or the brands that are available
to them. They’re in active problem-solving mode to find
a suitable product.
• Limited Problem-Solving:
– Now that customers have more information, they slow
down and begin comparing their choices.
• Habitual Response Behavior:
– Customers are fully aware of all the choices they have
and know which brands they prefer. Thus, every time
they make a purchase, they know where to go.
 Marketing Implications
• The Howard Sheth model of consumer
behavior suggests that the buyer’s journey is a
highly rational and methodical decision-
making process.
• In this model, customers put on a “problem-
solving” hat every step of the way — with
different variables influencing the course of
the journey.
 Nicosia Model
• The Nicosia Model places emphasis on the business first
and the consumer second.
• It argues that the company’s marketing messages
determines whether customers will buy or not.
• While it’s an attractive model because it places all the
power on businesses, it’s unwise to ignore the customer’s
internal factors that lead to a purchase decision.
• In other words, while you may offer the wittiest and most
effective marketing copy ever, a customer’s internal
attributes may have more sway in some instances over
others.
 Interpretation
• The model is comprised of four “fields”:
1. The business’ characteristics and the customer’s characteristics.
– What does your marketing messaging look like?
– What’s your customer’s perception of that messaging?
2. Search and evaluation.
– Like the Howard-Sheth model’s “limited problem-solving” stage,
the customer compares different brands basis the company’s
messaging.
3. Purchase decision.
– The purchase decision will occur after the company convinces the
customer to choose them as their retailer or provider.
4. Feedback.
– During the feedback field, the company will determine whether it
should continue using the same messaging, and the customer will
decide whether they will continue to be receptive to future
messages.
 Marketing Implications
• While the first part of the Howard-Sheth
model is effective, the second part is not.
• While companys have control over what brand
message goes out, they do not have control
over the customer’s thinking process.
• It is difficult to shift / change the customer
behaviour just on the basis of messaging.
• Infact, brands need to do much more.
 Engel-Kollat-Blackwell Model
• The Engel-Kollat-Blackwell model proposes that
consumers go through a 4-stage before purchasing a
product or service.

1. Information Input Stage:

– Here, the consumer gets information from marketing and
non-marketing sources, which also influence the problem
recognition stage of the decision-making process.
– If the consumer still does not arrive to a specific decision,
the search for external information will be activated in
order to arrive to a choice
 Interpretation
• Information Processing Stage:
– This stage consists of the consumer’s exposure, attention, perception,
acceptance, and retention of incoming information.
– The consumer must first be exposed to the message, allocate space for this
information, interpret the stimuli, and retain the message by transferring the
input to long-term memory.
• Decision Process Stage:
– The central focus of the model is on five basic decision-process stages -
Problem recognition, search for alternatives, alternate evaluation, purchase,
and outcomes.
– But it is not necessary for every consumer to go through all these stages.
• Variables Influencing the Decision Process:
– This stage consists of individual and environmental influences that affect all
five stages of the decision process.
– Individual characteristics include motives, values, lifestyle, and personality;
the social influences are culture, reference groups, and family.
– Situational influences, such as a consumer’s financial condition, also influence
the decision process.
 Marketing Implications
• Brands must look at internal as well as
external factors which help the customer in
every stage of decision making.
• Some prominent factors are - values, lifestyle,
personality, culture etc.
• However, this model does not show what
factors shape these items, and why different
types of personality can produce different
decision-making.
 Decision Making Model
• The consumer decision-making process outlines several
steps a customer takes from acknowledging the need for
a good or service to deciding if an end purchase meets
those requirements and expectations.
• By learning how customers make decisions is crucial
because it enables businesses to foresee user
requirements and develop marketing or sales tactics
based on those demands.

Post-
Problem Information Evaluation of Purchase
Purchase
Recognition Search Alternatives Decision
Behaviour

Post Purchase
Experience
 Interpretation
• By managing the following variables, CB can be managed effectively:
• Environmental Variables:
– Environmental variables refer to any external factors that could sway a
purchase decision.
– Customer demands, supplier relationships, and competitive pressure are a few
examples. Broader variables apply, too, such as technology, politics, and
culture.
• Organizational Variables:
– Organizational variables refer to internal factors that could sway a purchase
decision, such as the organization’s goals and evaluation criteria.
• Buying Center Variables:
– Who makes the final purchase decision?
– Who has the authority to sign and who influences the buying process?
– Buying center variables take all of this into account.
• Individual Variables:
– These variables refer to the demographic and psychographic information of
the individual prospect at the business.
– What’s their education and level of experience?
– What are their goals and desires?
 Marketing Implications
• Understanding the consumer decision-making
process is key if you want to attract more
customers and get them to make that crucial
purchase.
• By understanding this process, brands can
know customers better and genuinely
understand how to reach them.