Definition of Consumer Behavior Models

Economic or Marshallian Model

This theory was first advanced by the economists. They gave formal explanation of buyer behavior. According to this theory the consumers are assumed to be rational and conscious about economic calculations. They follow the law of marginal utility. An individual buyer seeks to spend his money on such goods which give maximum satisfaction (utility) according to his interests and at relative cost. The buying behavior is determined by the income – its distribution and level - affects the purchasing power. The economic factors which affect the buyer behavior are:

Disposable Personal Income

The economists attempted to establish relationship between income and spending. Disposable personal income represents potential purchasing power that a buyer has. The change in income has direct relation on buying habits. Personal consumption spending tends to both rise and fall at a slower rate than what disposable personal income does. Disposable of personal income depend on various situations such as:

Size of family income

Size of family and size of family income affect the spending and saving patterns. Usually large families spend more and small families spend less in comparison.

Income Expectation

The income expected to be got in future has direct relation with the buying behavior. The expectation of higher or lower income has a direct effect on spending plans.

Tendency to Spend and to Save

This is related to the habit of buyers to spend or save out of the disposable income. If the buyers give importance to the present needs, they dispose off their income. And buyers spend less if they give importance to future needs.

Liquidity of Funds

The present buying plans are greatly influenced by liquidity of assets readily convertible into cash. For example, readily marketable shares and bonds, bank balances come into this category. However, this convertible assets influence offer freedom to buyer, who actually buys with current income.

Consumer Credit

Facility of consumer credit system - hire purchase, installment purchase etc., plays an important role in purchase decision. A buyer can command more purchasing power. ‘Buy now and pay later’ plays its role effectively in the rapid growth of market for car, scooter, washing machine, furniture, television and so on.

The economic model of consumer behavior is uni-dimensional. It is based on certain predictions of buying behavior. They are:

Lower the price of the product, higher the sales

Lower the size of the substitute product, lower the sale of the product

Higher the real income, higher the sales of this product

Higher the promotional expenses, higher are the sales

However, ‘lower the price of a product, higher the sales’ may not hold good as buyer may feel that the product is sub-standard one.

The behavioral researchers believe that this model ignores all the other aspects such as perception, motivation, learning, attitude and personality, and socio-cultural factors. Further, it is also observed that consumer also gets influenced by other marketing variables such as products, effective distribution network and marketing communication. Hence, it is felt that the economic model is inadequate. It assumes that market is homogeneous where markets are assumed to be heterogeneous.

Learning or Pavlovian Model

Psychology has contributed lot to the marketers to understand the buyers. It explains how consumers learn about a product and the way they can recall from the memory, and the development of buying habits. All theories of buyer’s behavior have been primarily based on learning, viz., Stimulation-Response or S-R model, this theory of learning is explained as a process of repetition, motivation, conditioning and relationship. Repetition improves learning. For example, when advertisements are repeated, people may be able to understand further about the product. This is aimed at repeated advertisements for drawing the attention and interest of the people. According to stimulus- response theory learning involves the following steps.

Drive: It is a strong internal stimulus which impels action and when it is directed towards a drive reducing object, it becomes a motive. A drive thus motivates a person for action to satisfy the need. Drives may be primary-thrust, hunger etc., and secondary - desire for money, pride etc.

Cues: These are weak stimuli. They determine when the buyer will respond.

Response: Response is the feedback reaction of the buyer. It is an answer given to drive or cue. The individual has to choose some specific response in order to fulfill the drive or the need which was acting as a stimulus. For example, a hunger drive can be satisfied by visiting a shop known through an advertisement and buying the readymade food product. If that experience is satisfactory, this response of satisfaction is strengthened.

Drives, Cues, and Responses

Thus this learning of links which mean stimulus, cue and response results in habits. Along with this, attitudes and beliefs are also learnt. As it becomes a habit, the decision process for the individual becomes routine affair. Thus, learning model has the following prediction:

Learning refers to change in behavior brought about by practice or experience. Everything one does or thinks is learnt.

Product features such as price, quality, service, brand, package etc., acts as cues or hints influencing consumer behavior

Marketing communications such as advertising, sales promotion etc., also act as guides persuading buyer to purchase the product.

Response is decision to purchase.

Psychoanalytical Model

Sigmund Freud developed this theory. According to him human personality has three parts:

The Id, is the source of all mental energy that drives us to action

the super ego, the internal representation of what is social is approved conscience

The Ego, the conscious director of id impulses for finding him satisfaction in socially acceptable manner.

The buyer behavior depends upon the relative strength of the three elements in the personal ability. Motivational research has been involved in investigating motives of consumer behavior so as to develop suitable marketing implications accordingly. This approach has been used to generate idea for developing- design, features, advertising and other promotional techniques.

Sociological Model

According to this theory the individual decision and behavior are quite often influenced by the family and the society. He gets influenced by it and in turn also influences it in its path of development. He plays many roles as a part of formal and informal associations or organizations i.e., as a family member, employee of a firm, member of professional forum, and as an active member of an informal cultural organization. Hence he is largely influenced by the group in which he is a member. For example, the decision may be made by one, actual buying may be done by another, and the product is used by yet another member of the family. Here, a mother takes a decision to buy a tiny cycle for her child, the cycle is purchased by the father and the user is the child.

Howard - Sheth Model

The Howard - Sheth model shows the processes and variables influencing the buyer behavior before and during the purchase. It emphasizes three key variables- perception, learning and attitude formation. It explains the way consumers compare available products in order to choose the best which fits their needs and desires. Consumers learn by finding out the relevant information about products through two sources of information:

Social sources

Commercial sources

The gathered information is used for comparison of alternative brands according to various choice criteria. The basic structure of the model is given below

Basic Structure of Buying Behavior

The following predictions can be made about the model

Stimuli or perceived learning occurs and results in output

Output occurs on the basis of the perception and learning non-observable variables.

Exogenous or outside variables such as social class, financial status etc., are used to predict perception and learning

This model describes the buying behavior in various stages

Stage 1: Motives are based on needs demanding satisfaction. They lead to goal directed behavior satisfaction. Motives ignite a drive to search and secure information from alternatives. Stimulus- input variables are marketing programme and social environment.

Input or stimuli:

Product themselves in the market

Commercial information on them, say quality, price, availability and distinctiveness

Product information obtained from friends, acquaintances and reference groups.

Thus, a number of products or brands are perceived and considered by the consumers mind. In this manner the resulting perception is selected.

Stage 2: While evaluating, many brands are eliminated or left out for further consideration. Now, only few will receive further consideration. Each will have plus / minus points. These choice considerations act as connecting links between motives and selected brands choice consideration which provide a structure to motives and the process of learning and experience. These considerations develop as criteria/rule to decide on the goods that have the prospects of yielding maximum satisfaction. The market must offer a good marketing-mix that is used by the buyer to influence the choice criteria.

Stage3: The choice criteria gives rise to predisposition- the relative preference in favour of particular brand. Sudden hindrances may sometimes stop the process. This may be in form of price, inadequate supply of brand, external variables such as financial status, time pressure etc. If they do not occur, the preference results in a response output such as attention, comprehension, attitude, buying intention and preferably actual purchase.

Stage 4: Feedback of purchase experience is sent to the buyer which shows if the actual satisfaction was equal to the expected satisfaction. Satisfaction leads to repurchase, and repeat orders indicate brand loyalty. The marketer is interested in this outcome. Buying behavior is influenced by motives (rational / emotional curiosity) attitudes, perception, social factors and personal factors.

                                                                                                          Black Box of Buyer behavior

Thus models of buyer behavior are generally based on certain factors internal to the consumer e.g., learning, personality, attitudes and perceptions. The external factors may be in the form of group, cultural and inter-personal influences and effects advertising and communications. The action of individuals is the result of both internal / external factors and interactions to the consumer decision making processes. The modern concepts of the buying behavior state that the behavior is the result of interaction between people centered factors and situation centered factors.

                                                                                                        Nicosia Model

The marketer is expected to be aware of the person centered factors such as buyer motivation, learning, perceptions, attitudes, values and beliefs. Similarly, marketers must be aware of social environment and internal personal interactions influencing the buyer behavior.

Howard – Sheth Brand Buyer Behavior

Model Nicosia Model

The buyer behavior model is taken from the marketing mans point of view. It is also called systems model as the human is analysed as a system, with stimuli as the input to the system and the human behavior as an output of the system. Francesco Nicosia, an expert in consumer motivation and behavior has developed this in 1966. He tried to explain buyer behavior by establishing a link between the organization and its prospective consumer. Here the messages from the company initially influence the predisposition of the consumer towards the product and service. Based on the situation, the consumer will have a certain attitude towards the product. This may result in a search for the product or an evaluation of the product attributes by the consumer. If this step satisfies the consumer, it may result in a positive response, with a decision to buy the product or else the reverse may occur.

The Nicosia model divides the above activity explanation into four basic areas:

Area 1: Field one has two sub areas-the consumer attributes and the firms attributes. The advertising message from the company will reach the consumers attributes. Certain attributes may develop sometimes depending upon the way the message is received by the consumer. The newly developed attribute becomes the input for area 2.

Area 2: This area is related to the search and evaluation undertaken by the consumer of the advertised product and also to verify if other alternatives are variable. If the above step motivates to buy the product / service, it becomes the input for the third area.

Area 3: This area explains as how the consumer actually buys the product.

Area 4: This is related to the uses of the purchase items. This can also be used as an out put to receive feedback on sales results to the firm.

Summary

The heterogeneity among people across the world makes understanding consumer buying behavior an intricate and challenging task. Product motives and patronage motives play a crucial role in consumer purchases. Like individuals organizations also make many buying decisions. The major factors that distinguish it from consumer decision are Market structure and Demand, Buyer characteristics, and Decision process and buying patterns.

The degree of involvement has a lot of impact on search of information, Information processing, and Transmission of information. The various models of consumer involvement help marketers to study purchase behavior across product segments.

Consumers usually go through five stages in arriving at a purchase decision. In the first stage, the customer identifies an unsatisfied need. In the second stage consumer collect information about the product and brands. In a third stage, the consumer evaluates all the alternatives with the help of available information. Later in stage four, the customer makes a purchase decision. And finally in the fifth stage, consumer experiences post-purchase satisfaction or dissatisfaction. Organizational buyer has different decision making criteria. Decision making rules – Compensatory and Non compensatory – simplify the complex nature of decision making to consumers.

Understanding consumer behavior is the basis of the formulation of marketing strategies. Consumer behavior studies help in designing effective marketing strategies like, Marketing-mix Strategy, Market Segmentation Strategy, Product Positioning Strategy, and Marketing Research.

As consumer behavior is very complex to understand, consumer models aid marketer to put their effort to understand in right direction. The models –Economic, Learning, Psychoanalytic, Sociological, Howard-Sheth and Nicosia enables marketers to understand and predict consumer behavior in the market place.