NPIEL

Consumer Behavior
Vinod Gupta School of Management

Module - 5
CONSUMER BEHAVIOR

Sangeeta Sahney
Assistant Professor,
Vinod Gupta School of Management
Indian Institute of Technology
Kharagpur, India
Email. [email protected]

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Consumer Behavior
Vinod Gupta School of Management

MODULE 5: MODELS OF CONSUMERS (4 hours)

MODULE 5: MODELS OF CONSUMERS (4 hours)

MODELS OF CONSUMER BEHAVIOR

5.1 Models of Consumers

5.2 Models of Consumer Behavior: General Models
5.3 Models of Consumer Behavior: Basic Models
5.4 Models of Consumer Behavior: Specific Models

Introduction:
Consumers are different. Although the decision making process is the same, they have
varying perspectives and this impacts the final decision. Consumer behavior models help
a marketer in identifying and understanding a wide range of variables that could explain
consumer behavior. In this way these models help a marketer understand and predict
buyer behavior, and they help the marketer formulate better marketing programs and
strategies. Researchers have attempted to study the dynamics of consumer decision
making consumer behavior from varying orientations, and various models have been
proposed. These models have evolved from the economic paradigm of the 1940s, to the
irrational, impulsive, emotional and vulnerable social consumer of the 1950s and 1960s,
to the information processor of the 1960’s and 70s, to the cognitive and rational
consumer post 1980’s. The purchase paradigms have also evolved; there is the cognitive
paradigm, where purchase is regarded as an outcome of problem solving; the
reinforcement paradigm, where purchase is regarded as a learned behaviour; and the habit
paradigm, where it is regarded as a pre-established routine pattern of behaviour

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Consumer Behavior
Vinod Gupta School of Management

LESSON – 9 Models of Consumer Behavior I

Instructional Objectives:
After completion of this lesson, the student shall know about:
5.1 Models of Consumers
5.2 Models of Consumer Behavior: General Models

5.1 MODELS OF CONSUMERS:

Consumers approach the marketplaces differently; they go though the buying decision
process differently as it gets impacted by internal and external forces. Researchers have
attempted to understand the dynamics of consumer decision making and they have
classified four varying views and perspectives, the underlying forces operating within
consumers that could be employed to approach the marketplace. These are i) Economic
ii) Cognitive iii) Passive iv) Emotional.
i) Economic view: According to the economic perspective of studying consumers, the
consumer is regarded as being rational. The model assumes that there exists in the market
a state of perfect competition; the consumer is aware of the various alternatives; he has
the knowledge and ability to rank all of these; and he finally takes a rational decision. He
takes a decision and makes a choice as after taking into account the cost and benefit, and
the overall value in economic terms.
ii) Cognitive view: The consumer is regarded as being a problem solver, who searches
for products to fulfill his needs/wants. Consumer decisions are based on information
gathering and processing. The consumer is believed to take decisions after a lot of
thought and deliberation, so as to get maximum benefit and value.
iii) Passive view: Here, the consumer is regarded as irrational and impulsive, who
easily succumbs to the selling and promotional efforts of the marketer. It is assumed that
the consumers are submissive to the self-serving interests of the marketer and the
salespersons are powerful.
iv) Emotional view: The consumer is regarded as being emotional and impulsive.
who takes decisions based on moods and emotions. Marketers must put in efforts and
create positive mood and emotions.

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Consumer Behavior
Vinod Gupta School of Management

5.2 MODELS OF CONSUMER BEHAVIOR: General Models:

The consumer models refer to varying orientations and perspectives with which
consumers approach the marketplace and how/why they behave as they do. They refer to
how the varying orientations impact the buying decision process and overall buyer
behavior.
Various models have been proposed by researchers; these models can be classified as (a)
General models (b) Specific models. This session deals with the General Models. The
Specific Models are dealt with in the next session.

GENERAL MODELS: There are four models that fall under this category, viz.
Economic model, Psychological model, Psychoanalytic model and Sociological model

i) The Economic model: The economic model explains buying behavior from an
economic perspective; The assumption is that resources are scarce viz. a viz unlimited
needs; a consumer seeks value: he wants maximum benefit at minimum cost. The
economic models showed concern as to how scarce resources were allotted to satisfy the
unlimited needs and wants.
Economic models can be further classified into Micro economic models and Macro
economic models.

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Consumer Behavior
Vinod Gupta School of Management
Micro economic models:
The micro economic models focus on the act of purchasing; they focus on what an
average consumer would purchase and in what quantity; they also ignore why and how
the needs/wants get prioritized, and how the behavior is underpinned.
According to the micro economic view, consumers are rational in nature and
value utility. With resources being scarce, they would allocate money on their purchases
in a way that satisfies them maximally. The consumer decisions are thus based on benefit
to cost ratio; the consumer would settle on an alternative that provides the highest ratio in
terms of marginal utility.
The limitations of studying consumer behavior with this orientation is that
consumers are not always rational, and they seek average /adequate satisfaction and not
total satisfaction. Also, consumers assess the benefit to cost ratio differently; they define
the two variables “cost” and “ benefit” variedly; the issue is subjective. The view is also
silent about other forces that operate during the buying process.

Macro economic models:

The macro economic models focus on the overall trend in the economy that has an impact
and is also impacted upon by buying patterns. They focus on the aggregate flows in the
economy. Conclusion about consumer behavior are made after analyzing such flows.
This approach could also be studied with two orientations:
a) Relative income hypothesis: A persons’ expenses is influenced by his social
surrounding and group. With his income being constant, the relative expenses and the
resultant savings will not change, until and unless, there is a big change in the total
income. The hypothesis holds that what and how much a consumer spends is not solely
dependent on income, but is influenced by peers.
b) Permanent income hypothesis: Even if the total income increases, people initially
exhibit inertia towards spending as they want to accumulate wealth; so purchasing pattern
does not change immediately.
The limitations of studying consumer behavior with this orientation is that the
view is silent about other forces that operate during the buying process.

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Consumer Behavior
Vinod Gupta School of Management
ii) The Psychological model: The psychological model, also called the Learning
Model or the Pavlovian Learning Model, was proposed by classical psychologists led by
Pavlov. According to this model, consumption behavior and decision making is a
function of interactions between human needs and drives, stimuli and cues, responses and
reinforcements.
People have needs and wants; They are driven towards products and services
(stimuli and cues), which they purchase (response), and they expect a satisfying
experience (rewards and reinforcements); Repeat behavior would depend on
reinforcement received.
The model believes that behavior is deeply affected by the learning experiences of
the buyers; and learning is a product of information search, information processing,
reasoning and perception. Reinforcement leads to a habit formation and the decision
process for an individual becomes routinized, leading to brand loyalty. Consumers also
learn through trial and error and resultant experiences that get stored in our memory.
The limitations of studying consumer behavior with this approach is that the
model seems incomplete. Learning is not the only determinant in the buying process and
the decision making. The model totally ignores the role played by (a) other individual
determinants like perception, personality (the sub-conscious), attitudes; as well as (b)
interpersonal and group influences.

iii) Psychoanalytic model: The psychoanalytic model was proposed by Sigmund

Freud. The model tries to explain consumer behavior as a resultant of forces that operate
at subconscious level. The individual consumer has a set of deep seated motives which
drive him towards certain buying decisions
According to the model, buyers needs and desires operate at several levels of
consciousness. Not all of the behavior is understandable and explainable by the person.
Also not all of human behavior is overtly visible and explainable. Sometimes, the
behavior may not be realized and understood by the person himself. Such causes can be
understood by drawing inferences from observation and casual probing.
There have been two more contributions that have been made to the
psychoanalytic approach, these are a) Gestalt model b) Cognitive theory

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Consumer Behavior
Vinod Gupta School of Management

Gestalt model: The model based on Gestalt principles (meaning “patterns and
configuration”) lays emphasis on the perceptual processes that impact buying behavior.
According to this model, consumption behavior and decision making is based on how a
consumer perceives a stimuli ( the product and the service offering and the 4 Ps) viz a
viz. the external environment and his own prior experiences.

Cognitive theory: The model proposed by Leon Festinger, views the consumer as one
who faces a feeling of anxiety (dissonance), while he is making a purchase; this is
because he is faced with many alternatives, all of which seem desirable. Post-purchase,
this dissonance increases even further. There is an imbalance in the cognitive structure;
and the consumer tries to get out of this state as soon as he can. So a buyer gathers
information that supports his choice and avoids information that goes against it.

iv) Sociological model: The model is based on findings of Thorstien Veblen, and
focuses on the role played by social groups and social forces. A person’s consumption
pattern and buying behavior is affected by social factors; his family, friends, peers, social
groups, reference group and culture have a major role to play. According to the model,
man is perceived as a “social animal”, and thus he conforms to norms of its culture, sub
culture and groups amongst which he operates. Emulative factors and social influences
have a big role to play in consumer decision making.

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Consumer Behavior
Vinod Gupta School of Management

Table 1: MARKETING IMPLICATIONS OF MODELS

MODEL IMPLICATION
Economic model: -Consumers’ are price sensitive; they look out
for a value proposition and thus buy those
offerings that give them more benefit vis a vis
cost.

a) Micro economic -As a marketer, this implies that he should

offer to customers a Value proposition.
-Deals and sales promotion can also impact
buying decisions to his favor.

b) Macro economic Consumer purchases are affected by

fluctuations in the economy.

Psychological model -Consumers learn from experiences of self and

others.
-They would buy products and services that are
rewarding and would bring positive
reinforcement.
-Marketers should arrange for product
demonstrations.
-They should also encourage trials: free
samples, testing and sales promotion can help
elicit trials.
-If the consumer finds the product usage
satisfying, he would go for a repeat purchase.

Psychoanalytic model: -While consumers may look for functional

benefits while buying a product, they are also
affected by hedonic elements. The marketer
also needs to understand the consumer psyche
and design the 4Ps accordingly; this has
implications on pricing and promotion.

a) Gestalt This has implications for brand management;

branding, brand associations and imagery.

b) Cognitive -This is related to post-purchase behavior; the

marketer needs to help minimize the
consumer’s post-purchase dissonance.

Sociological model - A persons’ purchase behavior is affected by

his culture, sub culture and social group;
- Opinion leadership and social group appeals.

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Consumer Behavior
Vinod Gupta School of Management

REFERENCES FOR FURTHER READING:

1. Kotler P., and Armstrong, G., Principles of Marketing, Eleventh Edition, 2006,
Prentice-Hall.
2. Kotler P., and Keller K.L., Marketing Management, Thirteenth edition, 2009,
Pearson.
3. Loudon, D.L. and Bitta A.J. Della, Consumer Behavior, Fourth Edition, 2002,
Tata McGraw-Hill, New Delhi.
4. Peter, P.J. and Olson, J.C., Consumer Behavior and Marketing Strategy, Seventh
Edition, 2005, McGraw-Hill Higher Education.
5. Schiffman, L.G. and Kanuk, L.L., Consumer Behavior, Eight Edition, 2004,
Prentice Hall, India.
6. Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley & sons, Inc.

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Consumer Behavior
Vinod Gupta School of Management

FAQS (FREQUENTLY ASKED QUESTIONS):

Ques 1 What do you understand by the term “ Models of
Consumers”? What are the various views and perspectives?
Ans I the term “Models of Consumers”, refer to varying orientations and perspectives
with which consumers approach the marketplace and how/why they behave as they do.
There are 4 varying views and perspectives:, namely, Economic, Cognitive, Passive, and
Emotional.
i) Economic view:
- consumer is regarded as being rational.
- he takes a decision and makes a choice as after taking into account the cost and benefit,
and the overall value in economic terms.
ii ) Cognitive view:
- the consumer is regarded as being a problem solver, whose decisions are based on
information gathering and processing.
- he takes a decision after a lot of thought and deliberation, so as to get maximum benefit.
iii) Passive view:
- the consumer is regarded as irrational and impulsive, who easily succumbs to the selling
and promotional efforts of the marketer.
iv) Emotional view:
- the consumer is regarded as being emotional and impulsive.
- he takes decisions based on moods and emotions.

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Consumer Behavior
Vinod Gupta School of Management

Ques 2 Write short notes on the following:

a) Psychological model of Consumer Behavior
b) Psychoanalytic model of Consumer Behavior
Ans a) Psychological model of Consumer Behavior:
The model also called the Learning Model or the Pavlovian Learning Model was
proposed by classical psychologists led by Pavlov. According to the model, consumption
behavior and decision making is a function of interactions between human needs and
drives, stimuli and cues, and responses and reinforcements. People have needs and wants;
they are driven towards products and services (stimuli and cues), which they purchase
(response), and they expect a satisfying experience (rewards and reinforcements); repeat
behavior would depend on reinforcement received.

b) Psychoanalytic model:
The model proposed by Sigmund Freud, tries to explain consumer behavior as a resultant
of forces that operate at subconscious level. According to the model, buyers’ needs and
desires operate at several levels of consciousness; Consumption behavior and decision
making is dependent on a number of forces operating at the subconscious level; many of
the causes of such behavior are not visible to other people; sometimes, they may not be
realized and understood by the person himself. Such causes can be understood by
drawing inferences from observation and casual probing.
- Two other contributions under the psychoanalytic school are as follows:
i) Gestalt model: - consumption behavior and decision making is based on how a
consumer perceives a stimuli (the product and the service offering and the 4 Ps) viz a viz.
the external environment and his own prior experiences.
ii) Cognitive theory: according to the model, the consumer faces a feeling of anxiety
(dissonance), while he is making a purchase; this is because he is faced with many
alternatives, all of which seem desirable; Post-purchase, this dissonance increases even
further. So a buyer gathers information that supports his choice and avoids information
that goes against it.

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Consumer Behavior
Vinod Gupta School of Management

SELF EVALUATION TESTS/QUIZZES:

Section A True/false:
1. According to the cognitive view, a consumer takes a decision and makes a choice
as after taking into account the cost and benefit, and the overall value in economic
terms.
2. The cognitive view, holds relevance for post-purchase behavior.
Section B Fill up the blanks:
1. According to the _________________ view, the consumer is regarded as
irrational and impulsive, who easily succumbs to the selling and promotional
efforts of the marketer.
2. The ________________________model focuses on the overall trend in the
economy that has an impact and is also impacted upon by buying patterns.
3. The _____________________ model proposes that consumption behavior and
decision making is a function of interactions between human needs and drives,
stimuli and cues, and responses and reinforcements.
Section C Multiple choice questions:
1. The Gestalt model is a contribution from the ________________ school of thought.
a) Sociological b) Psychological
c) Psychoanalytic d) None of the above.

2. Which of the following is not true about the psychological model?

a) Consumers learn from experiences of self and others.
b) They would buy products and services that are rewarding and would bring positive
reinforcement.
c) They believe in what their social groups say.
d) Repeat behavior would depend on reinforcement received.

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Consumer Behavior
Vinod Gupta School of Management
Section D Short answers:
1. Which are the four models of consumers?
2. Mention the two kinds of economic views in studying consumer behavior?
3. Who were the proponents of a) Psychological model b) Psychanalytic model c)
Sociological Model.

KEY
Section A True/false:
1. False 2 False

Section B Fill up the blanks:

1. Passive 2. Macro-economic 3.Psychological

Section C Multiple choice questions:

1. c 2. c

Section D Short Answers:

1. Economic , Cognitive, Passive, Emotional
2. Micro-economic view, Macro Economic view.
3. a) Pavlov b) Freud c) Veblen.

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