Consumer Behaviour:

Consumer Modeling
Unit - II
 Models of Consumer Behaviour
• Studying consumer behaviour can be quite complex
– because of involvement of many variables
– their tendency to interact

• Models of consumer behaviour have been developed to overcome these

difficulties

• A model is defined as a simplified representation of a process or

relationship or reality

• Many models have been employed in the study of consumer behaviour

• Each model takes a different view of the consumer

 Models of Consumer Behaviour

Economic Model
• Focus was on the act of purchase (only a small portion of CB)

• It concentrated on what consumers would purchase and in what quantities

• In economics – assumed that man is a rational being

• Has perfect information about the market

• Who will evaluate all alternatives (cost and value) – select

(product/service) that provides maximum satisfaction (utility)
• Tastes and preferences were assumed to be known already

• Economists viewed the market as a collection of homogeneous buyers

• Price is regarded as the strongest motivation

 Models of Consumer Behaviour
• Economic model of CB is unidimensional

• Buying decisions of a person are governed by the concept of utility

• Consumers are assumed to follow the principle of maximum utility based

on the law of diminishing marginal utility
• Economists argued that perfectly rational consumer will always purchase
goods that provides them highest ratio of additional benefit to cost
(MU/P)
• Economic model is based on certain prediction of buying behaviour
 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
quantity of the original product bought
 Income effect – more the purchasing power, more will be the quantity purchased
 Models of Consumer Behaviour
Drawbacks of Economic Model
• Highly unrealistic assumptions (consumers strive for acceptable and not
maximum level of satisfaction)

• Economists have stated that consumers allocate their resources to

maximize satisfaction, but they could not measure satisfaction or utility

• Economic theory deals only with price and income influence on consumer
behaviour and ignore many aspects like
– Perception
– Attitudes
– Motivation
– Personality
– Learning process
– Social class
– Culture etc.
 Models of Consumer Behaviour
Drawbacks of Economic Model
• Most often consumers lack perfect knowledge regarding the market and
products

• Consumers use many variables, other than price to assess a products

utility

• Economic theory focuses only on purchasing act, whereas much of the

consumer behaviour occurs before and after this act.
 Models of Consumer Behaviour
Learning Model
• Unlike economists, psychologists were more interested in the formation of needs
and wants

• The process of learning is based on four fundamental factors: drives, cues,

response and reinforcement

• Drive – strong internal stimulus impelling action (hunger)

• Cue – a weak stimulus in the environment determining when, where and how an
individual responds to a drive (a restaurant is seen)

• Response – action to cue is response (go to the restaurant and satisfy hunger,
satisfied with the quality, )

• Reinforcement – takes place when the response is rewarding (come here again)
 Models of Consumer Behaviour
Learning Model
• If the response to cue is rewarding, the individual tends to repeat the
response, when the drive is aroused again.

• Repeated reinforcement leads to habit formation

• In marketing – learning will help marketers to understand how consumers

respond in new marketing situations.

• Or how they have learned and responded in the past in similar situations

• Learning theory teaches marketers that they can build up the demand for
the product
– by associating it with strong drives
– using motives as cues
– Providing positive reinforcement
 Models of Consumer Behaviour
Learning Model
• It helps the marketers introduce new products in highly competitive
markets

• The model suggests that marketers have to relate the product, brand
offering to the internal drives of a consumer

• Learning is not a perfect predictor of behaviour, as a variety of other

factors also influence consumers behaviour

• A learned response does not necessarily occur every time a stimulus

appears
 Models of Consumer Behaviour
Psychoanalytical Model
• Based on the work of psychologists who were concerned with personality.
Brain child of Sigmund Freud

• Has added new dimension to theory of consumer behaviour by

introducing psychological factors in decision making

• They were of the view that human needs and motives operate at conscious
as well as at subconscious levels

• According to Freud, human behaviour (personality) is the outcome of

a. ID: source of all psychic energy which drives to act
b. Super ego: internal representation of what is approved by the society
c. Ego: mediates between the unrestrained needs of ID and social constraints of super
ego
 Models of Consumer Behaviour
Psychoanalytical Model
• Helps the marketers to understand individuals real motive for purchasing
a particular product or brand

• Caused marketers to realize that they must provide the consumers socially
acceptable rationalization for their purchase

• Marketers have been using this approach to generate ideas for developing
products – design, features, advertising and other promotional techniques
 Models of Consumer Behaviour
Sociological Model
• The individual buyer is a part of the institution called society. He / She
living in the society, gets influenced by it and also influences it

• Consumer plays many roles in the society:

– Family member
– Employee of a firm
– Member of a professional firm
– Active member of an informal cultural organization etc

• Such interactions may play a role in influencing his buying behaviour

• Man’s attitude and behaviour are influenced by several levels of society,

culture, sub-culture, social classes, reference groups and family

• The challenge to marketer is to determine which of these social levels are

most important in influencing the demand for his product
• In past few years, marketing scholars have built buyer behaviour models
taking the marketing man’s point of view

• Nicosia model is one such buyer behaviour model

• Also called as systems model, because the human being is analyzed as a

system

• Stimuli as the input to the system and human behaviour as the output of
the system

• This model tries to explain consumer behaviour by establishing a link

between the organisation and its consumer
• The model concentrates on the communication process that occurs
between a firm and a consumer

• It uses flow of events, tracing through a sequence of stages and each stage
is identified as a field

• There are four fields or stages in the models

• Field one: represents the sources of firm’s message to the consumer’s

attitude

• It has 2 sub-fields:
– Firm’s attributes
– Consumers attributes (predispositions)
F ie ld 1 :
F ro m S o u rc e o f a m e s s a g e to
c o n s u m e r ’s a t t it u d e
The Nicosia Model

S u b F ie ld
1 S u b F ie ld
F ir m ’s M E S S A G E 2 A T T IT U D E
a tt r ib u te s E X P O S U R E C o n s u m e r s a ttr ib u te s
( p r e d is p o s it io n s )

F ie ld 2
S e a rc h S e a rc h fo r
a nd
E X P E R IE N C E e v a lu a t io n
o f m e an s
E v a lu a t io n e n d (s)
r e la t io n ( s )
( p r e - a c t io n
fie ld )

C o n s u m p t io n M O T IV A T IO N
F ie ld 4 T h e
S to ra g e
fe e d b a c k

D e c is io n F ie ld 3
( a c tio n ) T h e
p u r c h a s in g
a c t io n
P u r c h a s in g
B e h a v io u r