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Consumer Behaviour

Consumer Behaviour

Decision Process and Physical activities INDIVIDUALS engage


in while evaluating, acquiring using, disposing off Goods /
services i.e. Covers Decision to expend resources. What, Why,
When, Where and How often Consumers (Who) buy and use
goods/services.

Interdisciplinary Science involves Psychology, Sociology,


Economics, Anthropology etc.
Why study CB?
Consumers:
CB provides insight into What, Why, How, WE buy; understand
influence persuading consumers.

Organisations (micro perspective):


CB provides an understanding to achieve companys objectives by
predicting behaviour (positivism)

Society (Macro Perspectives):


CB provides idea on aggregate economic & Social trends.

Academicians / Scholars:
CB provides understanding and meaning behind consumer
behaviour (Interpretivism or expeimentalism)
Why study CB?

Consumer buyer behavior refers to the buying behavior of


final consumers individuals and households that buy goods
and services for personal consumption. All of these final
consumers combine to make up the consumer market. The
consumer market in the Indian subcontinent consists of more
than 1.5 billion people who consumer more than Rs. 70
trillion worth of goods and services each year, making one of
the more attractive consumer markets in the world. The world
consumer market consists of more than 6.6 billion people
who annually consume an estimated $65 trillion worth of
goods and services.
Consumer Behaviour Roles

Initiator
Influencer
Buyer
User
On whom to concentrate?
Models

Model : Specified version of reality


Types of models
Verbal
Graphical
Iconic
Numeric
Analog
Studying CB

Complex many variables & interacting, influencing each


other
Models
Microeconomics
Macroeconomics
Behavioral economics
Nicosia Model
Howard-Sheth Model
Engell-Blackwell Miniard Model
Bettmans Information Processing Model.
Decision Process

Problem recognition

Information search
and evaluation
Feedback

Purchasing Process

Post purchasing
behaviour
Simplified approach to study of CB:
Study of Factors influencing CB
External Variables
Group Dynamics & reference groups (Social groups)
Family
Social class
Culture
Subculture
Individual Determinants
Needs & Motivations
Personality and Self Concept
Consumer Perception
Learning
Consumer, motivational Involvement
Attitude formation & changes
Attitude
Decision Process

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Family Influences
A) Traditional models of
consumers
1. Microeconomic model:
Concentrates on act of purchase i.e. explaining what
consumers would purchase and in what quantity; ignores
why consumers develop needs and how the consumers
rank these preferences.
Assumption: Unlimited needs and wants; limited budget;
Price sole criterion; consumers knowledge about
products utility perfect.
A) Traditional models of
consumers
2. Macroeconomic model:
Concentrates on aggregate flows in the Economy
monetary value of goods and resources; where they are
directed; changes over time. Since these flows are
influenced by consumers, insights on consumer behaviour,
consumption and savings are drawn.
BOTH MODELS FOCUS ON RESULTS OF ECONOMIC
BEHAVIOUR, RATHER THAN ACTUAL CONSUMER BEHAVIOUR.
B) Behavioural Economics
(Katanas perspective)
Behavioural Economics (Katanas perspective):
Idea of discretionary income and its use for durables
purchases volatility in Markets affected by consumer
perceptions and economic expectations.
Katanas Perspective

Feedback

Actual
Psychological Consumer Economic
Economic
Processes Sentiment Behaviour
condition

Actual conditions
modified by consumer
C) Decision Process
Models
3. Nicosia Model: Interactive in design between organisation
and consumer.
Firm communicates with consumer through marketing
messages and consumers communicate through
purchases.
Both parties influence each others.
Nicosia Model (CIBB)

Field One: From Source of Message to Customer Attitude

Sub Field 2
Sub Field 1 Consumer's
Message
Firms Attributes Attitude Field Two:
Exposure
Attributes (especially creaction Field
predispositions)

Search
Evaluation
Field Four: Experience
Feedback

Motivation Field Three:


Consumption
Act of
Storage
Purchase
Decision
(Action)
Purchasing
Behaviour
C) Decision Process
Models
4. Howard Sheth model:
Major revisions
3 levels of learning (Decision making)
Extensive problem solving (EPS) : Consumers
knowledge and beliefs about brand are limited
Consumer seeks info on alternative brands.
Limited problem Solving (LPS) : Decision criteria well-
defined but consumer not fully able to assess brand
differences and hence clear preference.
Routinised response behavior : Consumer preference to
purchase of one particular brand.
Howard Sheth Model

Inputs Perceptual Constructs Learning Constructs Outputs

Stimuli Display
Intention
Significative Purchase
a. Quality Confidence
b. Price
c. Distinctiveness
d. Service Overt
Intention
e. Availability Search
Attitude
Symbolic
a. Quality
b. Price Attitude
c. Distinctiveness Stimulus
d. Service ambiguity
e. Availability Choice Brand
Motives Brand
Criteria Comprehension Comprehe
Social
nsion
a. Family
b. Reference
groups
c. Social Class Attention
Perceptual
Attention Satisfaction
bias
C) Decision Process
Models

Howard Sheth model:

Stage Amount of info Decision speed


needed prior to
buying
EPS High Slow
LPS Moderate Moderate
RRB Low Fast
C) Decision Process
Models
Howard Sheth model:
Model based on learning theory concepts.
Model explains brand choice behaviour over time as learning
takes place and buyer moves from EPS to RRB.
Component involved in the model.
a) Input variables
b) Output variables
c) Psychological variables
Perceptual constructs eg. Perceptual bias
Learning constructs eg. Motive
d) Exogenous variables : Importance of Purchase, time
pressure, consumer personality traits, Financial status
C) Decision Process
Models

Howard Sheth model:

Limitations
Measurement difficulties
Complex
Joint decision making exculded.
C) Decision Process
Models
5. Engel, Blackwell, Miniard Model
Advantages
Many variables influencing consumer included.
Focusses on level of consumer involvement
Emphasis on decision making process, regarding
purchase
Flow of model flexible
Theories of CB such as info processing, motivation and
change considered.
Limitations
Vagueness in role of some variables eg. Influence of
environmental variables.
Mechanistic model
Customer Decision Process Model

Need Recognition External


Culture
Stimuli Exposure Subculture
Marketer Internal Search Family
dominated Social group etc.
Other Attention
M Pre purchase
E Alternative
Comprehension M Evaluation
O
R Individual
Purchase
Acceptance Y Attitudes
Learning
Consumption Perception
Retention Motivation
Self image etc
Result
External
Search

Dis-satisfaction Satisfaction

Input Info Processing Decision Process Variables