Consumer Consumer Decision Decision Making Making ModelsModels

The consumer models refer to varying orientations and perspectives with which consumers approach the marketplace and how/why they behave as they do. They refer to how the varying orientations impact the buying decision process and overall buyer behavior.

Consumer Decision Making Models: -

1. Stimulus-response Model Of Buyer Behavior

2. The Five Values Influencing Consumer Choice Behavior

3. Solomon Model Of Comparison Process

4. Nicosia Model

5. Howard-sheth Model

6. Engel-kollat-blackwell Model

7. The Economic model

Stimulus-Response Model Of

Buyer Behavior

• Middleton (1994) presented an adapted model of consumer behavior tourism, which was termed the stimulus-response model of buyer behavior. This model is based on the four interactive components with the central component identified as 'buyer characteristics and decision process'.

• The model separates out motivators and determinants in consumer buying behavior and also emphasizes the important effects that an organization can have on the consumer buying process by the use of communication channels.

Sheth-Newman Gross Model of

Consumption Values

• According to this model, there are five consumption values influencing consumer choice behavior.

• These are functional, social, conditional, emotional, and epistemic values.

• Any or all of the five consumption values may influence the decision.

• Various disciplines (including economics, sociology, several branches of psychology, marketing and consumer behavior) have contributed theories and research findings relevant to these values, (Sheth et al. 1991).

• Each consumption value in the theory is consistent with various components of models advanced by Maslow (1970), Katona (1971), Katz (1960), and Hanna (1980). Five consumption values form the core of the model:

Solomon Model Of

Comparison Process

Nicosia Model

• This model focuses on the relationship between the firm and its potential consumers

• The firm communicates with consumers through its marketing messages (advertising), and the consumers react to these messages by purchasing response

• 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

Howard-sheth Model

This Model 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.

Engel-kollat-blackwell Model

This model was created to describe the increasing, fast-growing body of knowledge concerning consumer behavior. This model, like in other models, has gone through many revisions to improve its descriptive ability of the basic relationships between components and sub-components, this model consists also of four stages;

•Information Input•Information Processing•Decision Process•Variables Influencing The Decision Process

Factors affecting Consumer Decision

• Family • Reference and

groups • Social- economic

factors • Cultural factors

Family Decision-Making

FamilyTwo or More Persons related by blood or marriageReside with each other

Functions of a family

Traditional Family Life Cycle:

The Bachelor stage Newly Married Couple

Full nest 1 Full nest 2 Full nest 3

Married –No kids Empty nest 1 Empty nest 2

Solitary survivor ( retired)

Bachelors

Young singlesLow financial liability Low earning Less savings

• More spending on cars ,fashion . Recreation , food , vacations

Newly Married Couples

• Without children • Much better finalcial ststus then single • Spend on cars , vacations , lesiure • More susceptible towards advertising

Full Nest-I

• First child • Either – income decline (one takes care ) • More purchase of household furnitures

(dryers, furniture and furnishings for the child etc)

• More on baby care products ( baby food , vitamins , toys etc)

• Reduces the savings .

Full Nest-II

• The youngest child has reached the school • The employed spouse income has improved • The other spouse has returned to work • Consumption pattern heavily influenced by

children• More quantity of food packages , cleaning

supplies , bicycles etc • More towards discount stores ( Best price ,

More , Big Bazar etc ).

Full Nest-III

• Family grow older • Parents enter min 40’s• Financially well off• Replacement of furniture , automobiles –

luxury

Married no kids –older singles

• Single aged 40( never married , or divorced or death of the spouse ).

• Divorced financially not well off (expense of divorce and children expenses )

• Singles well off financially –saves for future

Empty Nest-I

• Financially stable • children left home – independent• More savings • Home improvements , luxary ,vacations ,

sports , second home etc .

Empty Nest-II

• Income earners have retired • Expenditure becomes health oriented .• Move to climate more suitable to health .• Part time works engagements .

Purcahse Influence Pattern

• Autonomic• Husband Dominant• Wife Dominant• Joint

Marital roles

in products

Wife dominant:

Women clothingWomen jewelry

Cosmetics Daily needs

products

Husband Dominant:

Sporting Equipments

Men’s business clothing

hardware's

Autonomic :

Toys and gamesBaby products

Luggage or other durables

Joint sync:

Home appliancesVacations

&Financial Products

Wife Dominant Ad

Husband Dominated

Strategies To Resolve Conflict

Advantages to study family life cycle

• It provides the view to consumption at different stages of FLC

• For making the promotions & channel more effective

• Tool for segmentation in market

Consumer Decision-Making Process

A five-step process used by consumers when buying goods or services.

Consumer Decision-Making Process

Postpurchase Behavior

Purchase

Evaluation of Alternatives

Information Search

Need Recognition

Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all stepsall steps

Need Recognition

Result of an imbalance between actual and desired states.

Need Recognition

Internal StimuliInternal StimuliandandExternal StimuliExternal Stimuli

Present Status

Preferred State

Marketing helps consumers recognize an imbalance between present status and preferred state

StimulusAny unit of input affecting one or more of the five senses:sightsmelltastetouchhearing

WantRecognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it.

Recognition of Unfulfilled Wants

• When a current product isn’t performing properly

• When the consumer is running out of an product

• When another product seems superior to the one currently used

Information SearchesProcess of recalling past information stored

in the memory.

Internal

Process of seeking information in the

outside environment.

External

Information SearchInternal Information Search

Recall information in memory

External Information search

Seek information in outside environment

Non-marketing controlled Marketing controlled

External Information Searches

Need MoreNeed More Information Information

More Risk More Risk Less knowledgeLess knowledgeLess product experienceLess product experienceHigh level of interestHigh level of interest

Less Risk Less Risk More knowledgeMore knowledgeMore product experienceMore product experienceLow level of interestLow level of interest

Need LessNeed Less Information Information

Evoked SetGroup of brands, resulting from an information search, from which a buyer can choose.

Evoked SetEvoked Set

Purchase!Purchase!

Evaluation of ProductsEvaluation of Products

Analyze product attributesAnalyze product attributes

Use cutoff criteriaUse cutoff criteria

Rank attributes by Rank attributes by importanceimportance

Evaluation of Alternatives

Purchase

Determines which attributes Determines which attributes are most important are most important in influencing a in influencing a consumerconsumer’’s choices choice

To buy To buy or not to buy...or not to buy...

Cognitive DissonanceInner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

Postpurchase Behavior

Can minimize through:Effective CommunicationFollow-upGuaranteesWarranties

Cognitive DissonanceCognitive Dissonance

?Did I make a good decision?Did I make a good decision?

Did I buy the right product?Did I buy the right product?

Did I get a good value?Did I get a good value?

Types of Consumer Buying Decisions

More Involvement

LessInvolvement

RoutineResponseBehavior

LimitedDecisionMaking

ExtensiveDecisionMaking

Five Factors influencing Decisions

1. Level of consumer involvement

2. Length of time to make decision

3. Cost of good or service

4. Degree of information search

5. Number of alternatives considered

Routine Response Behavior

• Little involvement in selection process

• Frequently purchased low cost goods• May stick with one brand• Buy first/evaluate later• Quick decision

Limited Decision Making

• Low levels of involvement

• Low to moderate cost goods

• Evaluation of a few alternative brands

• Short to moderate time to decide

Extensive Decision Making

High levels of involvement

High cost goods

Evaluation of many brands

Long time to decide

May experience cognitive dissonance

Level of Involvement

Situation

Social Visibility

Interest

Perceived Risk of Negative Consequences

Previous Experience

Factors Determining Level of Involvement

Marketing Implications of Involvement

High-involvement purchases require:extensive promotion to target market andgood advertisement

Low-involvement purchases require: in-store promotion and eye-catching package design

Factors Influencing Buying Decisions

Social Factors

Cultural Factors CONSUMER

DECISION-MAKINGPROCESS

BUY /

DON’T BUY

CultureSet of values norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next.

Cultural Influences on Buying Decisions

Values

Language

Myths

Customs

Rituals

Laws

Components ofComponents ofIndian Indian CultureCulture

Material Artifacts

Culture is...

Learned

Functional

Pervasive

Dynamic

Social ClassA group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.

Social Influences

Reference Groups

Opinion Leaders

Family Members

Social Influences on Buying Decisions

Reference Group

A group in society that influences an individual’s purchasing behavior.

Group• A group may be identified as an

aggregation of small number of persons who work for common goals .

• Two or more persons• Collective identity • Interaction • Shared goals interest .

Reference Groups • A useful framework of analysis of group

influence on the individual is the so called reference group .

• Primary reference group – with a great deal of influence .

• Secondary reference group: with a less influence (club members )

Reference Groups

Types ofTypes ofReference Reference GroupsGroups

Direct

Indirect

Primary

Secondary

Aspirational

Non-aspirational

Types of Influence of Reference Groups

• Informational : They serve as information sources and influence perceptions

• Normative : They affect an individual’s aspiration levels

• Identification : Their norms either constrain or stimulate consumer behavior of others like celebrity.

Opinion Leaders

An individual who influences the opinion of others.