Everything you need to know about the models of consumer behaviour.
It is very important for a company to know and understand the consumers’ response towards different product features, prices and advertising appeals, as well as their effect on the product getting a competitive edge over the other products. Stimulus response model of buyer behaviour is the starting point in this respect.
The models of consumer behaviour are:-
1. Traditional Models 2. Contemporary Models 3. Marshallian Model 4. Freud’s Model 5. Pavlovian Model 6. Howard-Sheth Model 7. The Economic Model 8. The Learning Model 9. The Psychoanalytical Model 10. The Sociological Model.
Models of Consumer Behaviour: Traditional Models, Contemporary Models, Marshallian Model and a Few Others
The early or traditional models were developed by economists with a view to understand economic systems. Economics helps to understand how scarce resources are allocated among unlimited wants and needs. The first four Models give a general view in terms of the Economic model, Learning model, Psychoanalytic model and the Sociological model.
Under economics, it is assumed that man is a rational human being, who will evaluate all the alternatives in terms of cost and value received and select that product/service which gives him/her maximum satisfaction (utility). Consumers are assumed to follow the principle of maximum utility based on the law of diminishing marginal utility. It is assumed that with limited purchasing power, and a set of needs and tastes, a consumer will allocate his/her expenditure over different products at given prices so as to maximise utility.
The law of equimarginal utility enables him to secure maximum utility from limited purchasing power.
Economic model of consumer behaviour is unidimensional. This means that buying decisions of a person are governed by the concept of utility. Being a rational man he will make his purchase decisions with the intention of maximising the utility/benefits.
Economic model is based on certain predictions of buying behaviour.
1. Price effect – Lesser the price of the product, more will be the quantity purchased.
2. Substitution effect – Lesser the price of the substitute product, lesser will be the quantity of the original product bought.
3. Income effect – More the purchasing power, more will be the quantity purchased
The assumption about the rational behaviour of human beings has been challenged by the behavioural scientists. They are of the opinion that while the predictions are useful, the model only explains how a consumer ought to behave, it does not throw light on how does the consumer actually behave.
Behavioural scientists feel the economic model is incomplete. They feel that Economics is assuming the market to be homogeneous where all the buyers will think and act alike and also focuses only on one aspect of the product i.e., income.
It has been argued upon that man is a complex entity and hence the need to adopt a multidisciplinary approach to understand consumer behaviour. Whereas, the model has ignored all vital aspects such as perception, motivation, learning, attitude, personality and socio-cultural factors.
Added to this, man is today living in a technologically advanced age with constant exposure to the various marketing variables such as superior technologically advanced quality products (and services), efficient network distribution centers, highly interactive media exposure etc. Under such circumstances man cannot be assumed to be a rational person who only treats ‘price’ as the deciding factor in his consumption related decisions.
Behaviour scientists have opined that broader perspectives need to be adopted while analysing the buyer behaviour. So apart from economics, even the role played by needs, motives, personality, self-concept and the socio-cultural factors have to be considered for understanding the buyer responses to various stimuli, which in turn could influence their buying behaviour.
Unlike the economists, classical psychologists have been interested in the formation and satisfaction of needs and tastes. They argued that living beings were influenced by both innate needs such as the primary needs of hunger, thirst, sex, shelter and learned needs like fear and guilt. A drive (internal stimulus) which when directed towards a drive reducing object becomes a motive.
The various products or services will act as stimuli to satisfy drives. For instance, a hungry person will be driven towards food, which after consumption will reduce the drive and also provide satisfaction. According to learning theorists, this response of satisfaction (feeling) reinforces the relationship between drive and the drive reducing stimulus object as well as the related cues.
Further, when consumers learn to associate connection between stimulus and response, it becomes a habit. There are certain cognitive theorists, who have advocated that human beings not only learn to link stimulus with response (S-R) but also about the formation of other cognitive processes such as, attitudes, values, beliefs, motivation etc.
In marketing context, ‘learning’ will help marketers to understand how consumers loam to respond in new marketing situations, or how they have learned and responded in the past in similar situations. Very often it is observed that consumer’s experience with one product from an organisation is likely to be generalised to the other products of the firm.
Conversely, consumers also learn to discriminate and this information will be useful in working out different marketing strategies. Simply stated this learning model will help marketers to promote associations of products with strong drives and cues and positive re-enforcements from the consumers.
This model is based on the work of psychologists who were concerned with personality. They were of the view that human needs and motives operated at the conscious as well as at the subconscious levels. This theory was developed by Sigmund Freud. According to him human behaviour (personality) is the outcome of (a) ‘id’ – the source of all psychic energy which drives to act, (b) ‘super ego’ – the internal representation of what is approved by the society, (c) ‘ego’ – the conscious directing ‘id’ impulses to find gratification in a socially accepted manner. Thus, we can say that human behaviour is directed by a complex set of deep-seated motives.
From the marketing point of view this means that buyers will be influenced by symbolic factors in buying a product. Motivational research has been involved in investigating motives of consumer behaviour so as to develop suitable marketing implications accordingly. Marketers have been using this approach to generate ideas for developing products – design, features, advertising and other promotional techniques.
According to this model the individual buyer is a part of the institution called society. Since he is living in a society, he gets influenced by it and in turn also influences it in its path of development. He is playing many roles as a part of various formal and informal associations or organisations such as a family member, as an employee of a firm, as a member of a professional forum and as an active member of an informal cultural organisation. Such interactions leave some impressions on him and may play a role in influencing his buying behaviour.
Intimate groups comprising of family, friends and close colleagues can exercise a strong influence on the lifestyle and the buying behaviour of an individual member. The peer group plays a very important role in acting as an influencing factor especially in adopting particular lifestyles and buying behaviour patterns. The group generally has an informal opinion leader, whose views are respected by the group. This leader is able to influence the individual member’s lifestyle and buying decisions.
Similarly, depending on the income, occupation and place of residence etc., each individual member is recognised as belonging to a certain social class. As a member of a particular class, he may enjoy certain status and prestige. Further, each class has its own standards of lifestyle and buying behaviour pattern. So an individual member will adopt the role suitable to conform to the style and behavioural pattern of the social class to which he/she belongs.
The marketers, through a process of market segmentation can work out on the common behaviour patterns of a specific class and group of buyers and try to influence their buying pattern.
With the evolution of the consumer behaviour study, newer approaches were used to understand what influences consumer behaviour. These were said to be contemporary models.
These contemporary models or views differed from the earlier models mainly because they focused on the decision process adopted by consumers and borrowed concepts from behavioural sciences field. Some of these models have been discussed hereunder.
i. The Howard Sheth Model of Buying Behaviour:
The Howard-Sheth model provides an integrating framework for a very sophisticated comprehensive theory of consumer behaviour. The model tries to represent the rational brand choice behaviour by buyers when faced with situations involving incomplete information and limited abilities.
The model refers to three levels of decision making:
a. Extensive Problem Solving:
The initial stages of decision making when the buyer has little information about brands and has not yet developed a well-defined and structured criteria to make a selection from the various products (choice criteria).
b. Limited Problem Solving:
In a slightly more advanced stage choice criteria which is well defined but the buyer is not clear and undecided on the set of brands which will best serve him. In this situation, the consumer is uncertain on the ‘best brand’ which will suit him (or her).
c. Routinized Response Behaviour:
The stage when buyers have well defined choice criteria along with strong predispositions towards one brand. In such a situation, there is hardly any confusion in the consumer’s mind and he is ready to purchase a particular brand with little evaluation of alternatives.
The model has borrowed the learning theory concepts to explain brand choice behaviour when learning takes place as the buyer moves from Extensive Problem Solving to Routinized Problem Solving behaviour.
In the past few years marketing scholars have built buyer behaviour models taking the marketing man’s point of view. The Nicosia model is one such buyer behaviour model. It is also said to be a systems model, because the human being is analysed as a system, with stimuli as the input to the system and the human behaviour as an output of the system.
This model was developed by Francesco Nicosia, an expert in consumer motivation and behaviour. Nicosia was one of the pioneers, who attempted to bring into focus the more complex decision process undertaken by consumers rather than the act of purchase itself. The Nicosia model tries to explain buyer behavior by establishing a link between the organisation and its (prospective) consumer.
The model suggests that messages from the first influences the predisposition of the consumer towards the product or 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 the above step satisfies the consumer, it may result in a positive response, with a decision to buy the product otherwise the reverse may occur.
The Nicosia model, groups the above activity explanations into four basic areas:
1. Field one has two sub areas – The consumers attribute and the firm’s attributes. The advertising message sent from the company will reach the consumer’s attributes. Depending on the way, the message is received by the consumer, a certain attribute may develop. This newly developed attribute becomes the input for Area two.
2. The second area or area two- is related to the search and evaluation, undertaken by the consumer, of the advertised product and also to verify if other alternatives are available. In case the above step results in a motivation to buy the product/service, it becomes the input for third area.
3. The third area explains how the consumer actually buys the product.
Evaluation of the Model and its Limitations:
The model can be said to be the pioneering efforts by Nicosia to identify the decision making process carried out by consumers. It is noteworthy to observe that the model has viewed consumers to be involved in an active role and that they move from general product knowledge towards specific brand information (knowledge), while being involved in a purchase behaviour.
However the model is said to have certain limitations. To mention a few-
Firstly, the flow is not complete and does not mention the various factors internal to the consumer.
Secondly, the assumption about the consumer being involved in the decision process with no predispositions about the various brands (or firms involved) is restricting.
And thirdly, the firm’s attributes and consumer attributes mentioned in the model seem to be overlapping.
Inspite of the limitations the model can be said to be a pioneering effort on the part of Nicosia to influence those who are involved in trying to understand consumer behaviour.
This model talks of consumer behaviour as a decision making process in the form of five step (activities) which occur over a period of time.
This model is a development of the original Engel, Kollat and Blackwell model first introduced in 1968. It shares certain things with the Howard-Sheth model. Both have similar scope and have the same level of complexity. Primarily the core of the EBM model is a decision process, which is augmented with inputs from information processing and other influencing factors also.
This is a complex model developed by F.E. Webster and Y. Wind, as an attempt to explain the multifaceted nature of organisational buying behaviour. This model refers to the environmental, organisational, interpersonal and individual buying determinants, which influence the organisational buyer(s). These determinants influence both the individual and group decision making processes and consequently the final buying decisions.
The environmental determinants comprise of the physical and technological factors, economic, political, legal and socio cultural environmental factors. These are external factors which cannot be controlled, but an understanding of the same may be crucial to succeed.
The organisational determinant is based on Harold Leavitt’s four elements of buying organisation namely-people, technology, structure and task. This is seen in ‘Buying Centre’, mentioned. The buying concepts emphasise the fact that a number of people participate in the buying decision process including individuals and groups from the various functional areas in the organisation.
An individual may be involved in one or more buying roles during organisational buying these roles could be of:
(a) Users- The ultimate users who often initiate the buying process and help in defining specifications.
(b) Influencers- They may or may not be directly connected with the decision, but their views or judgments of a product or a supplier carry a lot of weightage.
(c) Buyers- People who negotiate the purchase.
(d) Deciders- People who take the actual/decision (they may be formal or informal decision makers).
(e) Gate Keeper- The person who regulates the flow of information.
This model is a valuable contribution and helps in revealing the whole range of direct and indirect influences, which affect the organisational buying behaviour. However, the limitation is that this model provides only a static representation of a dynamic situation.
This model concentrates on the purchasing process and highlights the importance of four main factors:
I. The expectations of the individuals making up the DMU (Decision Making Unit).
II. The characteristics of both the product and the organization.
III. The nature of the decision making process.
IV. The situational variables.
Models of Consumer Behaviour – 4 Important Models: Marshallian Model, Freud’s Model, Pavlovian Model and Howard-Sheth Model
The models which help in the understanding of consumer behaviour are:
1. Marshallian Model.
2. Freud’s Model.
3. Pavlovian Model
4. Howard-Sheth Model.
1. Marshallian Model:
This model is based on the assumption that consumers have complete knowledge of their wants and of all available means to satisfy them. This model is based on the law of diminishing marginal utility. This model states that expenditures vary directly with income (price effect); lesser the price of the substitute product, lesser will be the utility of the product first bought (substitution effect); and more quantity will be purchased when a person’s income is increased (income effect).
The main criticism of this model is that it assumes the homogeneity of the market and similarity of buyer behaviour. It ignores the aspects such as motivation, perception, learning, attitude and socio cultural factors.
2. Freud’s Model:
Based on his psychoanalytic theory of personality, Freud proposed that the human personality consists of three interacting systems – the id, the superego and the ego.
The id is conceptualised as primitive and impulsive drives such as – thirst hunger and sex. The super ego is conceptualised as the individual’s internal expression of society’s moral ethical code of conduct. The ego attempts to balance the impulsive demands of the id and the socio-cultural constraints of the super ego.
Researchers who apply Freud’s theory to the study of consumer personality that human drives are largely unconscious and the consumers are primarily unaware of their true reasons for their buying behaviour. In other words, they consider the consumer’s appearance and possessions (e.g., clothing, jewelry, shoes and so forth) as reflections of the individual’s personality.
3. Pavlovian Model:
This model is named after the Russian physiologist Ivan Pavlov. In his experiments, Pavlov sounded a bell and then immediately applied a meat paste to the dogs’ tongues, which caused them to salivate.
The dogs associated the bell sound (the conditioned stimulus) with the meat paste (the unconditioned stimulus) and, after a number of pairings, gave the same unconditioned response (salivation) to the bell alone as they did to the meat paste.
In a consumer behaviour context, an unconditional stimulus might consist of a well- known brand symbol (such as – the Microsoft windows software programme) which implies technological superiority and trouble-free operation (the unconditional response).
4. Howard-Sheth Model:
In this model four sets of variables are deemed to determine consumer behaviour.
i. Stimulus – Input variables which are provided by three types of stimuli namely (a) significative stimuli (e.g., physical tangible characteristics of a product) (b) symbolic stimuli (e.g., a person’s perception of product’s characteristics) and (c) social stimuli (Provided by family, friends, social groups etc.).
ii. Internal variables that together show the state of the buyer (buyer’s motives, attitudes, experiences, perceptions etc.;)
iii. Exogenous variables that affect the buyer indirectly (these include social class, culture, time pressure and financial status of the buyer).
Response-output variables in terms of buyer’s behaviour based upon interaction of the first three sets of variables.
All the four variables are linked in a very systematic and logical manner. Much of consumer behaviour is repetitive. Consumers tend to store information in their memory, and establish a routine in their decision process.
Models of Consumer Behaviour – 4 Main Models: The Economic Model, The Learning Model, The Psychoanalytic Model and The Sociological Model
The influence of the various social sciences such as economics, psychology, sociology and anthropology has promoted marketing experts to propound certain models for explaining buyer’s behaviour.
Broadly, they include:
1. The economic model,
2. The learning model,
3. The psychoanalytic model, and
4. The sociological model.
According to the economic model of buyer behaviour, the buyer is a rational man and his buying decisions are totally governed by the concept of utility. If he has a certain amount of purchasing power, a set of needs to be met and a set of products to choose from, he will allocate this amount over the set of products in a very rational manner with the intention of maximizing the utility or benefits.
According to the learning model, which takes its cue from the Pavlovian stimulus – response theory, buyer behaviour can be influenced by manipulating the drives, stimuli and responses of the buyer. The model rests on man’s ability at learning, forgetting and discriminating.
The psychoanalytical model draws mainly from Freudian Psychology. According to this model, the individual consumer has a complex set of deep seated motives that drive him towards certain buying decisions. The buyer has a private world with all his hidden fears, suppressed desires and totally subjective longings. His buying action can be influenced by appealing to these desires and longings.
According to the sociological model, the individual buyer is influenced by society – by intimate groups as well as social classes. His buying decisions are not totally governed by utility, he has a desire to emulate, follow and fit in with his immediate environment. And, several of his buying decision may be governed by societal compulsions.
The ‘inputs’ (stimuli) that the consumer receives from his or her environment are:
i) Significative – the real (physical) aspects of the product or service (which the company make use of)
ii) Symbolic – the ideas or images attached by the supplier (for example by advertising)
iii) Social – the ideas or images attached to the product or services by ‘society’ (for example, by reference groups).
The ‘outputs’ are what happens, the consumer’s actions, as observable results of the input stimuli. Between inputs and outputs are the ‘constructs’, the processes which the consumer goes through to decide upon his or her actions.
These can be grouped into two areas:
a) Perceptual – those concerned with obtaining and handling information about the product or service.
b) Learning – the processes of learning that lead to the decision itself.
In the domain of evolutionary economics, consumers are seen as active agents following rules of behaviour, fairly easy to follow and implement because they require only a limited amount of information and capability of elaboration.