Models of Consumer Behavior-UNIT I

I. Traditional Models:

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. They are also called classical models of CB. These are
as follows:

i. Economic 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 which gives him/her maximum
satisfaction (utility). All human being expect a greater utility return on their scarce resources, the
resources being time, effort and money. Consumers are assumed to follow the principle of maximum
utility based on the law of diminishing marginal utility(Marginal Utility: change in utility from an increase
in consumption of that good or service) . 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 maximize utility.

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 maximizing the utility/benefits.

Value utility for human beings is more important than anything else. In spite of all kinds of motivations,
if the expected returnable value utility is lesser than the effort spent he is unlikely to buy the product.
He is likely to purchase the products that give him the maximum utility return.

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 behavioral
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.
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.

ii. Learning Model:

The theory of learning is based on the cognitive process of learning i.e. seeing will affect many cognitive
processes in human behavior e.g. building up of attitude, formation of values, strengthening of beliefs
and arising of motivation. Due to this, this model is also called stimulus to response model or SR model.

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, shelter and learned needs like fear and guilt. A drive (internal stimulus)
which when directed towards a drive reducing object becomes a motive. The learning model is totally
based on an individual’s capability to learn, overlook and differentiate.

The entire thought process behind this model works on Pavlov’s stimulus response that states that in
order to bring a change in the buyer’s behavior, one must change the drives, Stimuli and responses as
per the buyer’s attitudes and perceptions. Pavlov conducted a psychological experiment on his dog.

Pavlovian theory is a learning procedure that involves pairing a stimulus with a conditioned response.

In the famous experiments that Ivan Pavlov conducted with his dogs, Pavlov found that objects or events
could trigger a conditioned response. The experiments began with Pavlov demonstrating how the
presence of a bowl of dog food (stimulus) would trigger an unconditioned response (salivation). But
Pavlov noticed that the dogs started to associate his lab assistant with food, creating a learned and
conditioned response. This was an important scientific discovery.

Pavlov then designed an experiment using a bell as a neutral stimulus. As he gave food to the dogs, he
rang the bell. Then, after repeating this procedure, he tried ringing the bell without providing food to the
dogs. On its own, an increase in salivation occurred. The result of the experiment was a new conditioned
response in the dogs.

Pavlov’s theory later developed into classical conditioning, which refers to learning that associates an
unconditioned stimulus that already results in a response (such as a reflex) with a new, conditioned
stimulus. As a result, the new stimulus brings about the same response.

A simple application of Pavlovian theory is the response that some consumers have when they hear the
word “sale.” It can generate an urge to shop, even if people have no specific need at the time.

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 learn 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.

iii. Psychoanalytical Model:

Learning model of CB does not throw much light on the personality of humans. Having realized the
drawback, some psychologist devised a model that could define the inbuilt personality factors of a
human being in relation to the society around him, based on the psychoanalytical definition of the
human personality by SIDMUND FREUD.

Freud was the first to discuss the unconscious mind and its role in human behavior. He believed that
human behavior is an outcome of conscious and subconscious levels of human cerebral process. He
stated that there were three levels of consciousness. First is the unconscious mind that exists outside
your awareness at all times. Next is preconscious mind that contains all information that you are not
currently aware of but that can be recalled (memories, stored knowledge). Finally the conscious mind is
your current state of awareness (Thoughts, perceptions). According to him human behavior or
personality is the outcome of id, ego and super ego.

(a) ‘id’ – Id is the biological component of the personality that operates on instinct. It is the source
of all psychic energy which drives to act. It is always selfish and needy. It operates according to
pleasure principle that is of the idea that all your needs must be met immediately.

(b) ‘super ego’ – Super ego exists in all three levels of consciousness. The internal representation of
what is approved by the society. Super ego pushes a person to do what is right and ideal as well
as permitted by his conscience(view of what is wrong)

(c) ‘ego’ – Ego operates in the preconscious and the conscious mind. It is the part of personality
that makes your decisions. Ego operates as per the reality principle which states that the desires
of th id must be satisfied in a manner that is both socially appropriate and realistic.

Thus, we can say that human behaviour is directed by a complex set of deep-seated motives which drive
him towards specific buying behavior and socially acceptable decisions. A marketer can influence the
buying actions of individuals by appealing to his desires and longings. They have been using this
approach to generate ideas for developing products-design, features, advertising and other
promotional techniques.

iv. The Sociological Model:

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 or group of buyers and try to influence their buying decision.

II. Contemporary Models

 Howard-Sheth Model
 Engel-Kollat-Blackwell Model
 Nicosia Model
Howard-Sheth model (1969)
It is one of the most comprehensive models of consumer buying behavior and it uses the concept of
stimulus-response in order to explain buyer’s brand choice behavior over a period of time.

The four major components of the model are-

• Input variables
• Output variables
• Hypothetical constructs-Perceptual constructs and Learning constructs
• Exogenous variables
Input variables: The input variables are the stimuli come from the environment. The input variables
consist of informational cues about the attributes of a product or brand (i.e. quality, price,
distinctiveness, service and availability).Significant Stimulies are the actual elements constituting a
brand that the buyer confronts.EG.price, quality, service, availability.They influence the consumer
directly through the brand's attributes. Symbolic Stimulies are created by manufacturer representation
of their products in symbolic form.ge.advertisemnet, publicity. They derive from the same factors as
they are portrayed in the mass media and by salespeople, influencing the consumer in an indirect way.
Social stimulies are created by the social environment.eg.reference group, social classes. These are
influences that are internalized by the consumer before they can affect the decision process.
Output variables: The five output variables in the right hand portion of the model are buyer's
observable responses to stimulus inputs. They are arranged in order from Attention to Actual
Purchase. The purchase is the actual, overt act of buying and is the sequential result of the attention
(buyers total response to information intake), the brand comprehension, brand attitude (referring to
the evaluation of satisfying potential of the brand) and the buyer intention (a verbal statement made
in the light of the above externalizing factors that the preferred brand will be bought the next time the
buying is necessitated.
Hypothetical constructs: Hypothetical constructs have been classified in two groups - perceptual
constructs and learning constructs. The first deals with the way the individual perceives and responds
to the information from the input variables, accounting for stimulus ambiguity and perceptual bias.
The second deals with the stages from the buyer motives to his satisfaction in a buying situation. The
purchase intention is an outcome of the interplay of buyer motives, choice criteria, brand
comprehension, resultant brand attitude and the confidence associated with the purchase decision.
The motives are general or specific goals impelling to action, impinging upon the buyer intention are
also the attitudes about the existing brand alternatives in the buyer's evoked set, which result in an
arrangement of an order of preference regarding brands. Brand comprehension and the degree of
confidence that the buyer has about it, choice criteria and buying intentions, converge upon the
intention to buy
Exogenous variables: The model also includes some exogenous variables which are not defined but are
taken as constant. They can significantly affect buyer decisions. Some major exogenous variables
included in the model are importance of purchase, personalty variables, culture, social class, financial
status.

Engel-Kollat-Blackwell model (1978)

 T
he Engel-Kollat-Blackwell model is essentially a conscious problem solving and learning model of
consumer behaviour. This model has a good description of active information seeking and evaluation
processes of consumer. This model shows components of decision making and the relationship and
interaction among them. .In their model of consumer behaviour, they view consumer behavior as a
decision process and identify five activities occurring in this decision process over a period of time.
They are-

 Problem recognition/Need recognition

 Information search
 Evaluation of alternatives
 Choice

Problem recognition: the consumer will recognize a difference between his or her actual state and
what the ideal state should be. This may occur on account of external stimuli.
Information search: Initially the information available with the consumer may be consistent to other
beliefs and attitudes held by him or her. While being involved in an information seeking or search
stage, the consumer will try to gather more information from various sources. The individual gets
exposure of the stimuli which may catch his or her attention, be received and stored or retained in
memory. This method of information is selective in nature and the consumer will accept the
information, which is conclusive to what is perceived by them.
Alternative evaluation: Now the individual will evaluate the alternate brands. The methods used for
evaluating the various products will depend on the consumer’s underlying goals, motives and
personality. The consumer also has certain predetermined beliefs about the various brands in terms
of the characteristics associated with the different brands.
Choice: the consumer’s choice will depend on his or her intention and attitude. The choice will
depend on normative compliance and anticipated circumstances. Normative compliance relates to
 the extent to which the consumer is influenced by other people like friends, family members etc.
Outcome: The outcome may either be positive or negative.
Apart from these 5 steps the model also includes a number of other related variables grouped into
five categories.
1. Information input
2. Information processing
3. Product-brand evaluation
4. General motivating influences
5. Internalized environmental influences

Nicosia model
This model was developed in 1966, by Francesco Nicosia, an expert in consumer motivation and
behavior. The Nicosia model tries to explain buyer behavior by establishing a link between the
organization and its (prospective) consumer. The model suggests that messages from the firm 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 explanation into four basic areas-fields one has two sub
areas–the consumers attribute and firms 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. 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.
The third area explains how the consumer actually buys the product. And area four is related to the
uses of the purchased items. This fourth area can also be used as an output to receive feedback on
sales results to the firm.