Consumer Behaviour Models_E Notes

Models of Consumer
Behaviour: Howard Model,
Howard Seth Model, EKB
Model, Webster and wind
Model, Seth Industrial
Buyer Behaviour Model
Venkat.P

Consumer Behaviour Models | Venkat.P
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Consumer Behaviour Models
Consumers approach the marketplaces differently; they go through the buying decision
process differently as it gets impacted by internal and external forces. Researchers have
attempted to understand the dynamics of consumer decision making and they have
classified four varying views and perspectives, the underlying forces operating within
consumers that could be employed to approach the marketplace. These are i) Economic
ii) Cognitive iii) Passive iv) Emotional.
i) Economic view: According to the economic perspective of studying
consumers, the consumer is regarded as being rational. The model
assumes that there exists in the market a state of perfect competition; the
consumer is aware of the various alternatives; he has the knowledge and
ability to rank all of these; and he finally takes a rational decision. He
takes a decision and makes a choice as after taking into account the cost
and benefit, and the overall value in economic terms.
ii) Cognitive view: The consumer is regarded as being a problem solver,
who searches for products to fulfill his needs/wants. Consumer decisions
are based on information gathering and processing. The consumer is
believed to take decisions after a lot of thought and deliberation, so as to
get maximum benefit and value.
iii) Passive view: Here, the consumer is regarded as irrational and impulsive,
who easily succumbs to the selling and promotional efforts of the
marketer. It is assumed that the consumers are submissive to the self-
serving interests of the marketer and the salespersons are powerful.
iv) Emotional view: The consumer is regarded as being emotional and
impulsive. who takes decisions based on moods and emotions? Marketers
must put in efforts and create positive mood and emotions.
Consumer Behaviour Models – Economic Model
According to Economic model of consumer behaviour, consumers try to maximize the
utility from products on the basis of law of diminishing marginal utility. The desire of
consumers to obtain maximum gains by spending a minimum amount acts as the core
for the derivation of this model.
The economic model assumes that there is close similarity between the behaviour
of buyers and that a homogenous buying pattern is exhibited in the market.
The model is based on Income effect, Substitution effect and Price effect.

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 Income Effect substantiates that when a person earns more income, he will
have more money to spend and so he will purchase more.
 Substitution Effect substantiates the fact that if a substitute product is
available at a cheaper cost, then the product in question will be less
preferred or less utilized by people.
 Price Effect suggests that when the price of a product is less, consumers
tend to purchase more quantity of that product.
Consumer Behaviour Models – Engel-Blackwell-Kollat Model
Engel-Blackwell-Kollat Model is based upon four key components namely
Information processing (IP), Central Control Unit (CCU), Decision Making process
and influences exerted by the environment.
Information Processing (IP) is dependent on many factors which act as stimuli both
from a marketing and non-marketing perspective, it consists of four components that
are exposure, attention, comprehension and retention. Information Processing focuses
on the message to which the consumer is constantly exposed (exposure). When the
message instantly grabs the attention of the consumer (attention), the next logical step
for him is to comprehend about the same in the rational manner (comprehension). When
all of the activities happen in the perfect manner the message is retained in the memory
of the consumer (retention).
Central Control Unit (CCU) is based on three factors that are psychological in nature.
Previous experience of the consumers and their acquaintances about the product Criteria
based on which a consumer evaluates a product Changing mind sets of consumers and
Personality of the consumer based on which he or she takes the purchase decision. A
consumer processes and interprets all the information on the basis of the above three
factors.
The Decision process consists of recognizing the problem, internal and external
information search, evaluating the alternatives available and finally purchasing the
product. This component deals with the post purchase satisfaction levels as well as
dissatisfaction levels which play a crucial role in the future decision-making process of
the consumers.

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The Environmental influences consists of all those factors that may favor or disfavor
the purchase decision like: Income level of consumers, Financial status and social class
in the society Family Influences and other societal factors etc.
Howard Sheth Model
John Howard and Jagadish Sheth put forward the Howard Sheth model of consumer
behavior in 1969, in their publication entitled, ‘The Theory of buyer Behaviour’.
The Howard Sheth Model is a sophisticated integration of the various social,
psychological and marketing influences on consumer choice into a coherent sequence
of information processing. It aims not only to explain consumer behavior in terms of
cognitive functioning but to provide an empirically testable depiction of such behavior
and its outcomes (Howard 1977).
The logic of the Howard Sheth model of consumer behavior summarize like this. There
are inputs in the form of Stimuli. There are outputs beginning with attention to a given
stimulus and ending with purchase. In between the inputs and the outputs there are

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variables affecting perception and learning. These variables are termed ‘hypothetical’
since they cannot be directly measured at the time of occurrence.
The Howard Sheth model of consumer behavior suggests three levels of decision
making:
1. The first level describes the extensive problem solving. At this level the consumer does
not have any basic information or knowledge about the brand and he does not have any
preferences for any product. In this situation, the consumer will seek information about
all the different brands in the market before purchasing.
2. The second level is limited problem solving. This situation exists for consumers who
have little knowledge about the market, or partial knowledge about what they want to
purchase. In order to arrive at a brand preference some comparative brand information
is sought.
3. The third level is a habitual response behavior. In this level the consumer knows very
well about the different brands and he can differentiate between the different
characteristics of each product, and he already decides to purchase a particular product.
According to the Howard Sheth model of consumer behavior there are four major
sets of variables; namely:
1. Inputs:
These input variables consist of three distinct types of stimuli (information sources) in
the consumer’s environment. The marketer in the form of product or brand information
furnishes physical brand characteristics (significative stimuli) and verbal or visual
product characteristics (symbolic stimuli).
There are impersonal sources like mass media communication and advertising, over
which the firm has no control.
However, the information sources also include sales and service personnel who can
add and help the marketing efforts of the firm.
The third type is provided by the consumer’s social environment (family, reference
group, and social class).

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This social source is personal and the company/marketer has no control over this
source. All three types of stimuli provide inputs concerning the product class or specific
brands to the specific consumer.
2. Perceptual and Learning Constructs:
The central part of the model deals with the psychological variables involved when the
consumer is contemplating a decision.
Some of the variables are perceptual in nature, and are concerned with how the
consumer receives and understands the information from the input stimuli and other
parts of the model. For example, stimulus ambiguity happened when the consumer does
not understand the message from the environment.
Perceptual bias occurs if the consumer distorts the information received so that it fits
his or her established needs or experience. Learning constructs category, consumers’
goals, information about brands, criteria for evaluation alternatives, preferences and
buying intentions are all included.
The proposed interaction In between the different variables in the perceptual and
learning constructs and other sets give the model its distinctive advantage.
3. Outputs: The outputs are the results of the perceptual and learning variables and how
the consumers will response to these variables (attention, brand comprehension,
attitudes, and intention).
4. Exogenous (External) variables: Exogenous variables are not directly part of the
decision-making process. However, some relevant exogenous variables include the
importance of the purchase, consumer personality traits, religion, and time pressure.

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The decision-making process, which Howard-Sheth Model tries to explain, takes place
at three Inputs stages: Significance, Symbolic and Social stimuli. In both significative
and symbolic stimuli, the model emphasizes on material aspects such as price and
quality. These stimuli are not applicable in every society. While in social stimuli the
model does not mention the basis of decision-making in this stimulus, such as what
influence the family decision? This may differ from one society to another.
Most scholars agree that the study of consumer behavior was advanced and given an
impetus by Howard Sheth Model. The major advantage and strength of the model lied
in the precision with which a large number of variables have been linked in the working
relationships to cover most aspects of the purchase decision and the effective utilization
of contribution from the behavioral sciences.
Nicosia Model of Consumer Behavior
Nicosia Model of Consumer Behavior was developed in 1966, by Professor Francesco
M. Nicosia, an expert in consumer motivation and behavior. This model focuses on the
relationship between the firm and its potential consumers. The model suggests that

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messages from the firm (advertisements) 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. Looking to the model we will find that the firm and the consumer are connected
with each other, the firm tries to influence the consumer and the consumer is influencing
the firm by his decision.
The Nicosia model of Consumer Behavior is divided into four major fields:
1. Field 1: The firm’s attributes and the consumer’s attributes. The first field is divided
into two subfields. The first subfield deals with the firm’s marketing environment and
communication efforts that affect consumer attitudes, the competitive environment, and
characteristics of target market. Subfield two specifies the consumer characteristics e.g.,
experience, personality, and how he perceives the promotional idea toward the product
in this stage the consumer forms his attitude toward the firm’s product based on his
interpretation of the message.
Field 2: Search and evaluation. The consumer will start to search for other firm’s brand
and evaluate the firm’s brand in comparison with alternate brands. In this case the firm
motivates the consumer to purchase its brands.
Field 3: The act of the purchase. The result of motivation will arise by convincing the
consumer to purchase the firm products from a specific retailer.
Field 4: Feedback of sales results. This model analyses the feedback of both the firm
and the consumer after purchasing the product. The firm will benefit from its sales data
as a feedback, and the consumer will use his experience with the product affects the
individual’s attitude and predisposition’s concerning future messages from the firm.

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With this model Nicosia was able to represent consumer’s behavior when receivers of
a message and has agents in the buying process generated by that flow of information
from a company.
The Nicosia model of consumer behavior offers no detail explanation of the internal
factors, which may affect the personality of the consumer, and how the consumer
develops his attitude toward the product. For example, the consumer may find the firm’s
message very interesting, but virtually he cannot buy the firm’s brand because it
contains something prohibited according to his beliefs. Apparently it is very essential
to include such factors in the model, which give more interpretation about the attributes
affecting the decision process.
Customer-Based Brand Equity (CBBE) Model
Two questions often arise regarding brands: ‘What makes a brand strong?’ and ‘How
do you build a strong brand?’ To answer these questions, this section introduces
the customer-based brand equity (CBBE) model. This model incorporates theoretical
advances and managerial practices in understanding and influencing consumer

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behaviour. Although useful perspectives concerning brand equity have been put forth, the
CBBE model provides a unique point of view as to what brand equity is and how it
should be built, measured and managed.
The Customer-Based Brand Equity model approaches brand equity from the
perspective of the consumer – whether this be an individual or an organization.
Understanding the needs and wants of consumers and organizations and devising
products and campaigns to satisfy them are at the heart of successful marketing. In
particular, two fundamental questions faced by marketers are: ‘What do different brands
mean to consumers?’ and ‘How does the brand knowledge of consumers affect their
response to marketing activity?’
The basic premise of the Customer-Based Brand Equity model is that the power of a brand lies
in what customers have learned, felt, seen and heard about the brand as a result of their
experiences. In other words, the power of a brand lies in what resides in the minds of customers.
The challenge for marketers in building a strong brand is ensuring that customers have
the right type of experiences with products and services and their accompanying
marketing campaigns so that the desired thoughts, feelings, images, beliefs, perceptions
and opinions become linked to the brand. Customer-Based Brand Equity is defined as the
differential effect that brand knowledge has on consumer response to the marketing of
that brand.
A brand is said to have positive customer-based brand equity when consumers react
more favorably to a product and the way it is marketed when the brand is identified than
when it is not (eg, when the product is attributed to a fictitious name or is unnamed).
Thus, a brand with positive customer-based brand equity might result in consumers
being more accepting of a brand extension, less sensitive to price increases and
withdrawal of advertising support or more willing to seek the brand in a new

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distribution channel. On the other hand, a brand is said to have negative customer-based
brand equity if consumers react less favorably to marketing activity for the brand
compared with an unnamed or fictitiously named version of the product.
Industrial Buying Behavior Models
The Webster and Wind Model
The Webster and Wind Model of organizational buying behavior is quite
a comprehensive model. It considers four sets of variables: environmental,
organizational, buying center, and individual, which, affect the buying-decision making
process in a firm.
Source: R.E. Webster, Jr and Y Wind, journal of Marketing, 36, pp 12-17, April,
1972.
The environmental variables include physical, technological,
economic, political, legal, labor unions, competition and supplier information. For
example, in a recessionary economic condition, industrial firms minimize the quantity

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of items purchased. The environmental factors influence the buying decisions of
individual organisations. The organizational variables include objectives,
goals, organisations structure, purchasing policies and procedures, degree of
centralization in purchasing, and evaluation and reward system. These variables
particularly influence the composition and functioning of the buying center, and also,
the degree of centralization or decentralization in the purchasing function in the
buying organisations. The functioning of buying center is influenced by
the organizational variables, the environmental variables and the individual variables.
The output of the group decision-making process of the buying center includes
solutions to the buying problems of the organisations and also the satisfaction of
personal goals of individual members of the buying center. The strengths of the model,
developed in 1972, are that it is comprehensive, generally applicable, analytical, and
that it identifies many key variables, which could be considered while developing
marketing strategies by industrial marketers. However, the model is weak in
explaining the specific influence of the key variables.
The Sheth Model
In 1973, Professor Jagdish N Sheth developed the Sheth model of Organizational
Buying. This model highlights the decision-making by two or more individuals jointly,
and the psychological aspects of the decision-making individuals in the
industrial buying behavior
It includes three components and situational factors, which determine the choice
of a supplier or a brand in the buying decision making process in an organization. The
differences among the individual buyers’ expectations (Component 1) are caused by
the factors: background of individuals; information sources; active search;
perceptual distortion; and satisfaction with past purchases. The background of
individuals depends upon their education, role in the organization, and life style. The
factor perceptual distortion means the extent to which each individual
participant modifies information to make it consistent with his existing beliefs and
previous experiences.
It is difficult to measure perceptual distortion, although techniques such as factor
analysis and perceptual mapping are available for this purpose. In Component (2),
there are six variables, which determine whether the buying decisions are autonomous
or joint. According to the Sheth Model, larger the size of the organization and higher
the degree of decentralization, more will be possibilities of joint-decision making.

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Source: Jagdish N. sheth, “A Model of Industrial Buyer Behaviour”, Journal of
Marketing, 37, pp 50-56, October, 1973.
The methods used for conflict resolution in joint-decision making process
are indicated by the Component (3) in the model. Problem-solving and
persuasion methods are used when there is an agreement about the
organizational objectives. If there is no such agreement, bargaining takes place.
Conflict about the style of decision-making is resolved by politicking. Situation factors
can be varied like economic conditions, labour disputes, mergers and acquisitions. But
the model does not explain their influence on the buying process.
******* End ******

Consumer Behaviour Models_E Notes

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Consumer Behaviour Models_E Notes