22MBA15_Unit_2 Analysing Consumer Behaviour.ppt
- 1. Unit 2: Consumer Behaviour Analysis
- 2. Aims and Objectives Consumer behaviour is one of the major considerations for business organisations in designing and delivering successful products and services. The aim of this module is to apply theory to practical and realistic contexts which will enable the students to examine the psychological, social and cultural aspects of consumers and the impact of marketing strategies on marketing decision making, buyer behaviour and motives which in the process will make them to appreciate the influence consumer behaviour on marketing activities.
- 3. Module Learning Outcomes At the end of the module, students will be able to: • Define the consumer market and construct a simple model of consumer buyer behaviour • Explain the major factors that influence consumer buyer behaviour • Describe the major types of buying decision behaviour and the stages in the buyer decision process • Discuss the adoption and diffusion process for new products • Analyse the various Buying Roles, Buying Motives, Buyer Behaviour Models
- 4. Unit 2: Consumer Behaviour Analysis (09 hours) • Meaning and Characteristics Consumer Behaviour Analysis and Importance • Factors Influencing Consumer Behaviour • Consumer Purchase Decision Process • Buying Roles, Buying Motives, Buyer Behaviour Models • Case Studies in Indian Context
- 5. Consumer • Any individual who purchases goods and services from the market for his/her end-use is called a consumer. • In simpler words a consumer is one who consumes goods and services available in the market.
- 6. Points to Ponder Pay for 3 pieces of ‘Liril’ and get the 4th free !!! Buy one ‘Harpic’ and get an ‘Odonil’ free !!! Exchange your Maruti Alto for a Maruti Swift at a discount of Rs 40,000 !!! Buy ‘Fast Track’ watches and get 5 different colored wrist-bands free !!! New LG Television with unique ‘Child Lock’ feature !!! Why are such offers given to consumers?? 6
- 7. Points to Ponder Contd…. • Dar ke aage jeet hai’ ….. Mountain Dew • ‘Pappu Pass ho gaya’ ….. Cadbury’s • ‘We also make steel’ …… Tata Steel • ‘Filmi sitaron ka saundarya sabun’ …….. Lux • ‘Jaago India Jaago’ …….. Tata Tea • ‘Desh ki Dhadkan’ ……… Hero Honda • ‘An Idea can change your life’ ……. Idea How do such slogans impact consumers?? 7
- 8. Consumer Behaviour……..what is it? All such activities done by a consumer, while obtaining, consuming and disposing of products and services. This includes the decision making processes that precede and follow such actions like; • Why and why not a consumer buys a product ? • When does a consumer buy a product ? • What does a consumer buy? • How does consumer buy a product ? . 8
- 9. Consumer Behaviour Consumer Behaviour is a branch which deals with the various stages a consumer goes through before purchasing products or services for his end use. • The main catalyst which triggers the buying decision of an individual is need for a particular product/service. • The factors like Psychology, Sociology, Anthropology, Economics, Marketing and so on influence buying decision of a consumer.
- 10. Why study Consumer behaviour? • Consumers ‘evolve’ with time, learning, exposure and experience. They cannot be taken for granted. e.g. People booked their railway tickets from the station counters, now they prefer online purchase thru website. • As a consequence, a sound understanding of consumer behaviour is a pre- requisite for sustained success of any marketing program 10
- 11. 11 The study of Consumer Behaviour covers 1. Consumers in the Market Place. 2. Consumers as individuals. 3. Consumers as decision makers. 4. Consumers and subcultures. 5. Consumers and cultures.
- 12. 5-12 • Consumer buyer behaviour refers to the buying behaviour of final consumers—individuals and households who buy goods and services for personal consumption. • Consumer market refers to all of the personal consumption of final consumers. Consumer Buyer Behaviour
- 13. 13 Consumer Behaviour and Marketing Decisions • Market Segmentation: Process of dividing the market into distinct subsets of consumers with common needs and characteristics and selecting one or more segments to target with distinct marketing mix. E.g. Bathing soap, detergents, shampoos etc. • Segment Marketing: Serving needs of a particular group; different marketing mix for different segments. e.g. Vegetarian recipes by Haldiram. • Niche Marketing: Marketing to a single group, tailoring the mix to their specific needs and attract them, allowing the firm to engage in relationship marketing. e.g. Nutralite bread spread, Diet Coke, Sugar – free etc. • Differentiated Marketing: organizations sell multiple versions of a product; each appealing to different market segment. Differentiated strategy can produce greater sales. e.g. Pepsi in 300ml as well as 2 litres. • Individual Marketing: tailoring market mix to suit individual customers and create value for each individual. e.g. Designer clothes by Ritu Kumar, Manish Malhotra.
- 15. 15 Consumer Behaviour Model Marketing and Other Stimuli Buyer’s Black Box Buyer’s Response •Product •Price •Place •Promotion •Economic •Technological •Political •Cultural Characteristics affecting consumer behaviour Buyer’s Decision Process •Product Choice •Brand Choice •Dealer Choice • Purchase Timing • Purchase Amount
- 16. Characteristics Affecting Consumer Behaviour Buyer Cultural Psychological Social Cultural Personal 16
- 17. Characteristics Affecting Consumer Behaviour Buyer Psychological Personal Social Culture
- 18. Culture 18 • Culture is the learned values, perceptions, wants, and behaviour from family and other important institutions. • Values – Honesty e.g. Tata is an ‘honest brand’ • Perceptions – e.g. ‘fair & lovely’ will make you fairer. • Subculture - Groups of people with shared value systems based on common life experiences. Example: Hispanic Consumers, African American Consumers, Asian American Consumers, Mature Consumers
- 19. 5-19 Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviour. Measured by a combination of occupation, income, education, wealth, and other variables The major social classes: • Upper class • Middle class • Working class • Lower class People within a social class tend to exhibit similar buying behaviour. Example: Occupation, Income, Education, Wealth Social Class
- 20. 20 Factors Affecting Consumer behaviour: Social • Groups • Membership • Reference • Family • Husband, wife, kids • Influencer, buyer, user Roles and Status Social Factors
- 21. 5-21 • Membership groups have a direct influence and to which a person belongs. • Aspirational groups are groups to which an individual wishes to belong. • Reference groups are groups that form a comparison or reference in forming attitudes or behaviour. • Opinion leaders are people within a reference group with special skills, knowledge, personality, or other characteristics that can exert social influence on others. • Buzz marketing enlists opinion leaders to spread the word. • Social networking is a new form of buzz marketing • MySpace.com • Facebook.com Social Factors - Groups
- 22. 5-22 •Family is the most important consumer-buying organization in society. •Social roles and status are the groups, family, clubs, and organizations to which a person belongs that can define role and social status. Social Factors - Family
- 23. 5-23 Personal Factors • Personal characteristics • Age and life-cycle stage • Occupation • Economic situation • Lifestyle • Personality and self-concept
- 24. Factors Affecting Consumer Behavior: Personal Personal Influences Age and Family Life Cycle Stage Occupation Economic Situation Lifestyle Identification Activities Opinions Interests Personality & Self-Concept
- 25. 5-25 Age and life-cycle stage Axis Bank has identified five life-stage segments: • Youth—younger than 18 years • Getting started—18-35 years • Builders—35-50 years • Accumulators—50-60 years • Preservers—over 60 years
- 26. 5-26 Occupation and Economic Situation • Occupation affects the goods and services bought by consumers. • Economic situation includes trends in: • Personal income • Savings • Interest rates
- 27. 5-27 Lifestyle Lifestyle is a person’s pattern of living as expressed in his or her psychographics. • Measures a consumer’s AIOs (activities, interests, and opinions) to capture information about a person’s pattern of acting and interacting in the environment. SRI Consulting’s Values and Lifestyle (VALS) typology: Classifies people according to how they spend money and time • Primary motivations: Ideals, Achievement, Self-expression • Resources: 1. High Resources (Innovators exhibit all primary motivations) 2. Low Resources (Survivors do not exhibit strong primary motivation)
- 28. 28 28 Lifestyle Dimension Activities Interests Opinions Demographics Work Family Themselves Age Hobbies Home Social issues Education Social events Job Politics Income Vacation Community Business Occupation Entertainment Recreation Economics Family size Club membership Fashion Education Dwelling Community Food Products Geography Shopping Media Future City size sports Achievements Culture Stages in life cycle Joseph T. Plummer, “The concept and application of lifestyle segmentation, “Journal of Marketing, 38)
- 29. 29 VALS 2 Achievers Actualizers Strugglers Strivers Thinkers Believers Experiencers Makers High on Resources High on Innovation Low on Resources Low on Innovation Principle Oriented Status Oriented Action Oriented
- 31. 5-31 Personality and Self-Concept Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment. Brand personality refers to the specific mix of human traits that may be attributed to a particular brand: • Sincerity • Excitement • Competence • Sophistication • Ruggedness • Self-concept refers to people’s possessions that contribute to and reflect their identities.
- 33. 33 Psychological Factors Motivation Perception Learning Beliefs and Attitudes Factors Affecting Consumer behaviour: Psychological
- 34. Characteristics Affecting Consumer Behaviour Psychological Factors •Motivation •Perception •Learning •Beliefs and attitudes 5-34
- 35. 5-35 Motivation • A motive is a need that is sufficiently pressing to direct the person to seek satisfaction. • Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations. Motivation refers to an activated state within a person that leads to goal-directed behaviour. It consists of the drives, urges, wishes, or desires that initiate the sequence of events leading to a behaviour.
- 36. 36 • Need recognition occurs when a perceived discrepancy exists between an actual and a desired state of being • Needs can be either innate or learned. • Needs are never fully satisfied. • Feelings and emotions accompany needs • Expressive needs involve desires by consumers to fulfill social and/or aesthetic requirements. E.g. buying of a M F Hussain Painting • Utilitarian needs involve desires by consumers to solve basic problems . E.g. filling a car’s gas tank. What is Motivation?
- 37. 37 • A banner announcing “50% off” on Lewis Jeans – leading to youth discussing plans to visit the store. • A combo pack of “Harpic & Odonil” - leading housewives shifting their favorite store. Motivation begins a stimulus that leads to the recognition of a need. E.g. the free Odonil with Harpic was a stimulus for the housewife What is Motivation?
- 38. 38 Theories of Motivation Maslow’s Need Hierarchy McClelland’s Theory of Learned Needs
- 39. 5-39 Motivation Abraham Maslow’s Hierarchy of Needs • People are driven by particular needs at particular times. • Human needs are arranged in a hierarchy from most pressing to least pressing.
- 40. 40 McClelland’s Theory of Learned Needs Achievement motivation is seeking to get ahead, to strive for success, and to take responsibility for solving problems. Need for affiliation motivates people to make friends, to become members of groups, and to associate with others. Need for power refers to the desire to obtain and exercise control over others. Need for uniqueness refers to desires to perceive ourselves as original and different.
- 41. 5-41 Perception • Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes: • Selective attention • Selective distortion • Selective retention
- 42. 5-42 Perception Contd…. • Selective attention is the tendency for people to screen out most of the information to which they are exposed. • Selective distortion is the tendency for people to interpret information in a way that will support what they already believe. • Selective retention is the tendency to remember good points made about a brand they favor and to forget good points about competing brands.
- 43. 43 Selective Exposure Selective Comprehension/ Distortion Selective Retention Consumer pays attention to certain stimuli and ignores others Consumer interprets info so that it is consistent with his beliefs Average consumer only remembers 30% of information heard Three Different Perceptual Processes
- 44. 44 Perceived Risk • Perceived risk represents the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences. • Perceived risk is a consumer’s perception of the overall negativity of a course of action based upon as assessment of the possible negative outcomes and of the likelihood that these outcomes will occur. • Perceived risk consists of two major concepts - the negative outcomes of a decision and the probability these outcomes will occur.
- 45. 45 Factors Influencing Risk Perception 1. Characteristics of the person—e.g., need for stimulation 2. Nature of the task- Voluntary risks are perceived as less risky than involuntary tasks. 3. Characteristics of the product—price 4. Salience of negative outcomes
- 46. 46 7 Types of Consumer Risks 1. Financial/Economic 2. Performance 3. Physical/Personal 4. Psychological 5. Social 6. Time 7. Opportunity Loss
- 47. 47 Six risk-reduction strategies 1. Be brand loyal and consistently purchase the same brand. 2. Buy through brand image and purchase a quality national brand. 3. Buy through store image from a retailer that you trust. 4. Seek out information in order to make a well informed decision. 5. Buy the most expensive brand, which is likely to have high quality. 6. Buy the least expensive brand in order to reduce financial risk.
- 48. 5-48 Learning • Learning is the changes in an individual’s behaviour arising from experience and occurs through interplay of: • Drives • Stimuli • Cues • Responses • Reinforcement
- 49. 49 Learning • Kotler’s Definition : Learning involves changes in an individual’s behaviour arising out of experience. Most of the human behaviour is learned over time out of experience. • Schiffman and Kanuk’s Definition : Learning is a process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behaviour. • Loudon and Della Bitta’s Definition : Learning can be viewed as a relatively permanent change in behaviour occurring as a result of experience.
- 50. Salient Features of Learning 1. Consumer learning is a process, and thus it continuously changes and evolves as a result of newly acquired knowledge. 2. This knowledge can be obtained from reading, discussing, observing, thinking, etc. Or from actual experience. 3. Both the newly acquired knowledge and personal experience serve as a feedback. 4. This also serve as a future behaviour in similar situations. 5. Not all learning is deliberate. Learning can be : • Intentional : acquired as a result of careful search for information with effort. • Incidental : acquired as a result of accident or by the way, without much effort. 6. The term “Learning” generally covers all ranges of learning from simple reflexive responses to abstract concepts or complex problem solving capability.
- 51. 51 Elements of Learning 1. Motives, motivation or drive is very important for learning. E.g. showing adsfor winter goods just before winter and summer products just before summer. 2. Cues - Motives stimulate learning, whereas “Cues” are the stimuli that give direction to these motives. E.g. in the market place, price, styling, packaging, store display all serve as cues to help consumer to decide a particular product from a group. 3. Response - Response is how the consumers react to the motives or a cue, and how they behave. Response can be overt (open, physical or visible) or covert (hidden or mental). 4. Reinforcement - Reinforcement is an important element which increases the probability (tendency or likelihood) of a particular response to occur in future as a result of a given set of motives and cues.
- 52. 52 Classical Conditioning We have to apply Pavlov’s Conditioning Theory Lets consider ‘Zoo Zoo’ when paired with ________ means mobile service provider. Whenever we see ‘Kingfisher’ we are reminded of _________ company This implies that…… A neutral stimulus, such as a brand name, is paired with another stimulus that elicits a response. Through the repetition of the pairing, the neutral stimulus takes on the ability to elicit the response.
- 53. 53 Unconditioned/Secondary Stimulus Unconditioned Response Pairing Conditioned Stimulus Conditioned Response Baba Ramdev Emotions Pathanjali Emotions Classical Conditioning Relations
- 54. 54 Classical Conditioning: Applications Applications: Communications--advertising, public relations, personal selling. Goal: identify powerful positive stimulus and associate brand with it. Examples of powerful emotions causing stimuli: Beautiful people Patriotic themes, Religious symbols Music, Beautiful scenes Negative stimuli can be associated with competitors. Credit card insignia may elicit spending responses
- 55. 55 Operant Conditioning • The process in which the frequency of occurrence of a bit of behaviour is modified by the consequences of the behaviour. • If positively reinforced, the likelihood of the behaviour being repeated increases. E.g. buy one shirt, get another shirt at 50% discount. Buy two shirts, get the third at 75% discount. • If punished, the likelihood of the behaviour being repeated decreases. E.g. the more electricity you use, the rate per unit increases.
- 56. 56 Reinforcement and Influencing Behaviour A reinforcer is anything that occurs after a behaviour and changes the likelihood that it will be emitted again. Positive reinforcers are positive rewards that follow immediately after a behaviour occurs. Negative reinforcers are the removal of an aversive stimulus.
- 57. 57 Secondary Reinforcers Secondary Reinforcers are a previously neutral stimulus that acquires reinforcing properties through its association with a primary reinforcer. Over a period of time, previously neutral stimuli can become secondary reinforcers. In marketing, most reinforcers are secondary (e.g. a product performing well, a reduction in price)
- 58. 58 A Punisher A Punisher is any stimulus whose presence after a behaviour decreases the likelihood of the behaviour reoccurring. e.g. anti-smoking ads.
- 59. 59 Extinction & Eliminating Behaviour Once an operant response is conditioned, it will persist as long as it is periodically reinforced. Extinction is the disappearance of a response due to lack of reinforcement.
- 60. 5-60 Beliefs and Attitudes • Belief is a descriptive thought that a person has about something (Brand of product/service) based on: • Knowledge • Opinion • Faith • Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea.
- 61. Consumer Purchase Decision Process
- 62. 62 •How do we know when to shop or buy a product/service? •What are the triggers that initiate an awareness & search? •What are the internal & external sources of such triggers?
- 63. 63 Consumer Decision-Making Process Postpurchase behaviour Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps
- 64. Consumer Buyer Decision-Making Process Need Recognition Information Search Evaluation of Alternatives Purchase Decision Postpurchase behaviour
- 65. Consumer Buyer Decision Process Step 1. Need Recognition External Stimuli • TV advertising • Magazine ad • Radio slogan •Stimuli in the environment Internal Stimuli • Hunger • Thirst • A person’s normal needs Need Recognition Difference between an actual state and a desired state
- 67. 67 • When the current product/service is not satisfying the need • When the consumer is running out of an product/service • When another product/service seems superior to the one currently being used
- 68. 68 DEGREE OF DISCREPANCY DESIRED STATE ACTUAL STATE BELOW THRESHOLD AT OR ABOVE THRESHOLD NO NEED RECOGNITION NEED RECOGNITION
- 69. •Family, friends, neighbors •Most influential source of information •Advertising, salespeople •Receives most information from these sources •Mass Media •Consumer-rating groups •Handling the product •Examining the product •Using the product Personal Sources Commercial Sources Public Sources Experiential Sources Consumer Buyer Decision Process Step 2. Information Search
- 70. 70 Internal search involves the scanning of one's memory to recall previous experiences or knowledge concerning solutions to the problem/satisfying need. Generally done for frequently purchased products/low involvement products/services . External search may be necessary when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and/or the cost of gathering information is low. Generally done for high involvement products
- 71. Product Attributes Evaluation of Quality, Price, & Features Degree of Importance Which attributes matter most to me? Brand Beliefs What do I believe about each available brand? Total Product Satisfaction Based on what I’m looking for, how satisfied would I be with each product? Evaluation Procedures Choosing a product (and brand) based on one or more attributes. Consumer Buyer Decision Process Step 3. Evaluation of Alternatives
- 72. 72 Degree of Importance LG SAMSUNG VIDEOCON SONY 5 Brand Name 4 4 2 5 4 Picture Quality 4 4 2 5 3 Looks/Design 5 5 3 4 2 Price 3 4 5 2 1 After Sales Service 5 5 3 2 LG 4x5 + 4x4 + 5x3 + 3x2 + 5x1 = 62 SAMSUNG 4x5 + 4x4 + 5x3 + 4x2 + 5x1 = 64 VIDEOCON 2x5 + 2x4 + 3x3 + 5x2 + 3x1 = 40 SONY 5x5 + 5x4 + 4x3 + 2x2 + 2x1 = 63 Choosing a Brand on the basis of degree of importance of the determinant attributes
- 73. Purchase Intention Desire to buy the most preferred brand Purchase Decision Attitudes of others Unexpected situational factors Consumer Buyer Decision Process Step 4. Purchase Decisions
- 74. Consumer’s Expectations of Product’s Performance Dissatisfied Customer Satisfied Customer! Product’s Perceived Performance Cognitive Dissonance Consumer Buyer Decision Process Step 4. Post Purchase Behaviour
- 75. 75 Model of Consumer Behaviour Stimuli (marketer dominated, other) External search Memory Internal search Exposure Attention Comprehension Acceptance Retention Search Need recognition Alternative evaluation Purchase Outcomes Dissatisfaction Satisfaction Individual differences • resources • motivation & involvement • knowledge • attitudes • personality, values, lifestyle Influences • culture • social class • family • situation Start
- 76. Types of Buying Decisions Complex Buying behaviour Dissonance- Reducing Buying behaviour Variety- Seeking behaviour Habitual Buying behaviour High Involvement Significant differences between brands Few differences between brands Low Involvement 1. Complex buying behaviour 2. Dissonance-reducing buying behaviour 3. Habitual buying behaviour 4. Variety-seeking buying behaviour
- 77. 77 Involvement and Problem-Solving Variations More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making
- 78. 78 Comparison of problem-solving variations
- 79. 5-79 Types of Buying Decision Behaviour Complex Buying behaviour • Occurs when consumers are highly motivated in a purchase and perceive significant differences among brands. • Purchasers are highly motivated when: • Product is expensive • Product is risky • Product is purchased infrequently • Product is highly self-expressive
- 80. 5-80 Types of Buying Decision behaviour • Dissonance-reducing buying behaviour occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. • Post-purchase dissonance occurs when the consumer notices certain disadvantages of the product purchased or hears favorable things about a product not purchased.
- 81. 5-81 Types of Buying Decision Behaviour • Habitual buying behaviour occurs when consumers have low involvement and there is little significant brand difference. • Variety-seeking buying behaviour occurs when consumers have low involvement and there are significant brand differences.
- 82. Buying Motives • Buying Motives “ The thoughts, feelings, emotions and instincts that induces customer to buy a product are called as buying motives”. According to Prof. D.J.Duncan, “buying motives are those influences or considerations which provide the impulse to buy, induce action and determine choice in the purchase of goods and services”.
- 83. Buying Motives . BUYING MOTIVES PRODUCT BUYING MOTIVES PATRONAGE BUYING MOTIVES Emotional Product Buying Motive Rational Product Buying Motive Emotional Patronage Buying Motive Rational Patronage Buying Motive
- 84. Emotional Product Buying Motive • Product buying motives are those influences and reasons which prompt a buyer to chose a particular product in preference to others. • The preferences may be design, shape, dimension, size, color, package etc. • Product Buying Motives are classified into two: 1. Emotional Product Buying Motives 2. Rational Product Buying Motives
- 85. Emotional Product Buying Motive • When a buyer decides to purchase a product without thinking over the matter logically and carefully. • The buyer takes the decisions on the basis of emotions. • Following are the list of factors that influence the emotional product buying motives:
- 86. Emotional Product Buying Motive 1. Pride 2. Imitation 3. Affection 4. Comfort 5. Sexual Appeal 6. Habit 7. Recreation 8. Distinctiveness or individuality
- 87. Rational Product Buying Motive • When buyer examines pros and cons of purchasing a product and takes decisions then the behavior is called as rational product buying motives. • Buyers will be looking for any of the following factors: 1. Safety or security 2. Value of money 3. Suitability and utility 4. Durability 5. Convenience
- 88. Patronage Buying Motives • These are those considerations or reasons that make a buyer patronage a particular shop in preference to other shops while buying a product. • Patronage buying motives can be classified as: 1. Emotional Patronage Buying Motives 2. Rational Patronage Buying Motives
- 89. Emotional Patronage Buying Motives • Patronizing a particular shop without logical thinking or reasoning. • This involves the following decisions: 1. Appearance of the shop 2. Visual merchandizing 3. Reference group purchase 4. Prestige issue 5. Imitation
- 90. Rational Patronage Buying Motives • When the buyer analyzes a shop carefully and buys the product, it is called as rational patronage buying motives. • This includes the following factors: 1. Convenience 2. Value for money 3. Financial schemes and facilities 4. Availability of wide range of products 5. Reputation of the shop 6. Sales force efficiency 7. Service provided by the sales executives.
- 91. Buyer Behavior Models 1. The Economic Model 2. Learning Model 3. Psychological Model 4. The Sociological Model 5. The Howard Sheth Model of buying behaviour 6. The Nicosia Model 7. The Engle-Kollat-Blackwell Model 8. Engel Blackwell and Miniard (EBM) Model 9. Webstar and Wind Model of organizational buying behaviour 10. The Sheth Model of Industrial buying
- 92. Buyer Behavior Models Traditional Models • The Economic Model • Learning Model • Psychological Model • The Sociological Model • Contemporary Models • The Howard Sheth Model of buying behaviour • The Nicosia Model • The Engel Kollat Blackwell Model • Engel Blackwell and Miniard (EBM) Model • Webstar and Wind Model of organizational buying behaviour • The Sheth Model of Industrial Buying
- 93. Economic Model This model assumes that with limited purchasing power and a set of needs and tastes, a consumer will allocate his/ her expenditure over different products at a given prices so as to maximize utility. Bases for Economic Model: • Price Effect • Substitution Effect • Income Effect Criticism: • Fails to explain how does the consumer actually behave. • Incompleteness in the Model. • Lack of broader perspective.
- 94. Learning Model • This model help marketers to promote association of products with strong drivers and cues, which would lead to positive reinforcement from the consumers. • In marketing context, ‘learning’ will help marketers to understand how consumer learn to respond in new marketing situations, or how they have learned and respond in the past in similar situations. • As Consumers also learn to discriminate and this information will be useful in working out different marketing strategies.
- 95. Psychological Model • This model based on the work of psychologists who were concerned with personality. The view was on how human needs and motives operates on buying. • This theory was developed by Sigmund Freud. According to him human behaviour is the outcome of 1. Id 2. Super Ego 3. Ego • This model is concerned with personality and says that human behaviour to a great extent is directed by a complex set of deep seated motives. • Helps the marketer to know how buyers influenced by symbolic factors in buying a product.
- 96. Sociological Model • As per this model, an individual buyer is a part of the institution called society, gets influenced by it and in turn, also influences it in its path of development. • The interactions with all the set of society leave some impressions on him and may play a role in influencing his buying behaviour. • 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.
- 98. Howard Sheth Model of Buying Behaviour • It attempts to throw light on the rational brand behaviour shown by buyers when faced with situations involving incomplete information and limited abilities. • The model refers to three levels of decision making: 1. Extensive problem solving 2. Limited problem solving 3. Routinized response behaviour • The model has borrowed the learning theory concepts to explain brand choice behaviour when learning takes places as the buyer moves from extensive to routinized problem solving behaviour. • The model makes significant contribution to understand consumer behaviour by identifying the variables which influence consumers.
- 99. Howard Sheth Model of Buying Behaviour (Input Variables) The model consists of: 1. Input variables 2. Output variables 3. Hypothetic constructs 4. Exogenous variables • Input Variables: these variables acts as stimuli in the environment. Stimuli can be of Significative, Symbolic & Social • Significative stimuli are those actual elements of brands which the buyer confronts, where as Symbolic stimuli are those which are used by marketers to represent their products in a symbolic form. Social stimuli are generated by the social environment such as family, friends, groups etc.
- 100. Howard Sheth Model of Buying Behaviour (Output Variables) These are which buyer’s observable responses to stimulus inputs. They appear in the sequence as below: 1. Attention: Based on the importance of the buyer’s information intake. 2. Comprehension: the store of information the buyer has about the brand. 3. Attitude: the buyer’s evaluation of the particular brand's potential to satisfy his or her motives. 4. Intention: the brand which the buyer intends to buy. 5. Purchase behaviour: the act of actually purchasing, which reflects the buyer’s predisposition to buy as modified by any of the inhibitors.
- 101. Howard Sheth Model of Buying Behaviour (Hypothetical Constructs) The model proposes a number of intervening variables which have been categorised into two major groups: perceptual and learning constructs Perceptual Constructs include: 1. Sensitivity to information: the degree to which the buyer regulates the stimulus information flow. 2. Perceptual bias: refers to distorting or altering information 3. Search for information: it involves actively seeking information on the brands or their characteristics.
- 102. Howard Sheth Model of Buying Behaviour (Hypothetical Constructs) The buyer’s learning constructs can be defined as: Motives are general or specific goals impelling action. 1. Brand potential of the evoked set refer to the buyer’s perception on the ability of brands in his/her evoked set to satisfy his or her goals. 2. Decision mediators are based on the motives. The buyer will have certain mental rules for matching and ranking the purchase alternatives. 3. Predisposition refers to a preference towards brand in the evoked set which expresses an attitude towards them. 4. Inhibitors refers to environmental forces like price and time pressure which may inhibit or put restrain on the purchase of a preferred brand. 5. Satisfaction the extent to which, post actual purchase will measure up to the buyer’s expectation
- 103. Howard Sheth Model of Buying Behaviour (Exogenous variables) These are list of a number of external variables (external to the buyer) which can significantly influence buyer decisions.
- 104. Howard Sheth Model of Buying Behaviour (Limitations) 1. There is a absence of sharp distinctions between exogenous variables and other variables. 2. Some of the variables, which are not well defined, and are difficult to measure too. 3. The model is quite complex and not very easy to comprehend.
- 105. Nicosia Model of Buying Behaviour
- 106. Nicosia Model of Buying Behaviour • This model attempts to explain buying behaviour by establishing a link between the organisation and its prospective customer. It analyse human being as a system with stimuli as the input to the system and the human behaviour as an output of the system. • The model suggests that message from the first influences the predisposition of the consumer towards the product or services. 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 customer satisfies with above it may result in a positive response, with a decision to buy the product otherwise the reverse may occur.
- 107. Nicosia Model of Buying Behaviour The Nicosia Model explains in 4 basic areas: • Field 1:- the consumer attribute and the firm’s attributes. The advt. message sent from the company will reach the consumer attributes. • Field 2:- it is related to the search and evaluation, undertaken by the consumer, of the advertised product and also to verify if other alternatives are variable. • Field 3:- it explains how the consumer actually buys the product. • Field 4:- it is related to the uses of the purchased items. It can also be related to an output to receive feedback on sales results by organisation.
- 108. Nicosia Model of Buying Behaviour (Limitations) 1. The flow is not completed and does not mention the various factors internal to the consumer. 2. The assumption about the consumer being involved in the decision process with no predisposition about the various brands is restricting. 3. Overlapping between firm’s attributes and consumers attributes.
- 109. Engel Kollat Blackwell (EKB) Model of Buying Behaviour This model talks of consumer behaviour as a decision-making process in the form of five steps (activities) and other related variables which occur over a period of time. The 5 steps involved in the decision process: 1. Problem Recognition 2. Information Search 3. Alternative Evaluation 4. Choice 5. Outcome
- 111. Engel Kollat Blackwell (EKB) Model of Buying Behaviour Other related Variables included in this model: 1. Information input 2. Information processing 3. Product – brand evaluation 4. General motivating influences 5. Internationalised environment influences
- 112. Engel Kollat Blackwell (EKB) Model of Buying Behaviour About the model 1. The model has emphasised on the conscious decision making process adopted by a consumer. 2. The model is easy to understand and is flexible. 3. This model recognises that a consumer may not go through all the steps always. This is because in case of repeat purchases the consumer may bypass some of the steps. 4. One limitation, the inclusion of environmental variables and general motivating influences but not specifying the effect of these on the buyer behaviour.
- 113. Engel Blackwell Miniard (EBM) Model of Buying Behaviour It shares certain things with Howard-Sheth model. The core of the EBM model is a decision process which is augmented with inputs from information processing and other influencing factors. Four sections of the Model: 1. Input 2. Information Processing 3. Decision process and 4. Variables influencing decision process.
- 115. Engel Blackwell Miniard (EBM) Model of Buying Behaviour • The EBM Model when compared to the Howard sheth model is more coherent and flexible than the latter. • This model also includes human processes like memory, information processing and considers both the positive and negative purchase outcomes.