This document discusses various models of consumer behavior including traditional models like the economic, learning, and psychoanalytic models as well as contemporary models like the Howard Sheth, Nicosia, Webster and Wind, and Engel, Blackwell and Minard models. It provides details on key aspects of each model such as their assumptions, variables, decision processes, and limitations. The economic model views consumers as rational decision makers seeking to maximize utility within constraints. The learning model examines how experiences shape consumer behavior. Contemporary models offer more holistic perspectives that integrate additional influences.

2.  Consumer Behaviour can be defined as the behaviour
that consumers display in searching for, purchasing,
evaluating, and disposing of products and services that
they expect will satisfy their needs.
 Focuses on how individuals make decisions to spend
their available resources on consumption
 The term customer refers to the purchaser of a product
or service whereas the term consumer refers to the end
user of a product or service.

3. Models of consumer behavior
 Traditional models:
Economic Model
Learning Model
Psychoanalytic Model
Sociological Model

4. Contemporary models
 Horward Sheth model
 Nicosia
 Webster and Wind
 Engel, Blackwell and Minard model

5. Economic Model
 Synthesized by Alfred Marshall based on the Theory of
Marginal Utility and Micro-Economic Theory.
 The Focus is on the “Act of Purchase” of an “Average
Consumer”.
 Explains “What” a Consumer would purchase and “In
What Quantity”.
 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.

6. Basic Assumptions
 Individual needs are unlimited
 Individual needs cannot be fully satisfied
 Individual is completely aware of his needs
 Individual is a rational buyer
 Individual has the perfect information about the utility of
products available in the market
 The utility of a product or service gets reduced with each
subsequent purchase
 Price of goods are the sole sacrifice involved in obtaining
a product or service
 Market is a collection of homogeneous individuals

7. Criticism to Economic Model
 Economic Models ignores the effect of
• Perception
• Attitude
• Motivation
• Personality
• Learning Process
• Social Class
• Culture

8. 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.

9. Psychoanalytical Model of Consumer
Behaviour
Psychoanalytic theory is attributed to the work of
eminent psychologist Sigmund Freud.
Introduced personality as a motivating force in human
behaviour .
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.
Mental framework of a human being is composed of
three elements
• The Id
• The Superego
• The Ego

10. Contd………..
 Id is what an individual is born with.
 Super-ego are formed out of the values
 Ego acts as a balance between the Id and the
Super-ego
 Id remains at the core of each need
 Individuals show behaviour as a gratification to
their Id

11. Criticism to Psychoanalytical Model
 All the behaviours cannot be attributed to satisfaction of
Id.
 This model views consumers as individuals with minimal
influence of the family, society, reference groups, or
other social and group influences.
 Values of individual are liable to change over a period of
time through changes created in perception, learning,
attitude building which this model ignores.

12. 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.

13.  Family, friends and close associates exert the
maximum influence
 Opinion Leader influences the life-style and buying
behaviour of an individual

14. The 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:
 Extensive problem solving
 Limited problem solving
 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.

15. Four components involved in the
model:
 Input variables
 Output variables
 Hypothetic constructs
 Exogenous variables
The model makes significant contribution to
understand consumer behaviour by identifying
the variables which influence consumers.

16. 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.

17. Output variables:
These are which buyer’s observable responses to stimulus
inputs. They appear in the sequence as below:
 Attention: Based on the importance of the buyer’s
information intake.
 Comprehension: the store of information the buyer has
about the brand.
 Attitude: the buyer’s evaluation of the particular brand's
potential to satisfy his or her motives.
 Intention: the brand which the buyer intends to buy.
 Purchase behaviour: the act of actually purchasing,
which reflects the buyer’s predisposition to buy as
modified by any of the inhibitors.

18. 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:
 Sensitivity to information: the degree to which the buyer
regulates the stimulus information flow.
 Perceptual bias: refers to distorting or altering information
 Search for information: it involves actively seeking
information on the brands or their characteristics.

19. The buyer’s learning constructs can be defined as:
 Motives are general or specific goals impelling action.
 Brand potential of the evoked set refer to the buyer’s
perception on the ability of brands in his pr her evoked
set to satisfy his or her goals.
 Decision mediators are based on the motives. The buyer
will have certain mental rules for matching and ranking
the purchase alternatives.
 Predisposition refers to a preference towards brand in the
evoked set which expresses an attitude towards them.
 Inhibitors refers to environmental forces like price and
time pressure which may inhibit or put restrain on the
purchase of a preferred brand.
 Satisfaction the extent to which, post actual purchase will
measure upto the buyer’s expectation of it.

20.  Exogenous variables:
These are list of a number of external variables
(external to the buyer) which can significantly
influence buyer decisions.

21. The Howard Sheth Model of buying
behaviour

22. Limitations of the model:
 There is a absence of sharp distinctions between
exogenous variables and other variables.
 Some of the variables, which are not well
defined, and are difficult to measure too.
 The model is quite complex and not very easy
to comprehend.

23. The Nicosia Model
Proposed by Francesco Nicosia in 1970s
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.

24. 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.
If the process results in motivation to buy, it becomes the input for
Field 3
Field 3:- it explains how the consumer actually buys the product.
Transformation of the motivation into the act of buying

25. 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.

26. The Nicosia Model

27. Limitations:
 The flow is not completed and does not mention the various
factors internal to the consumer.
 The assumption about the consumer being involved in the
decision process with no predisposition about the various
brands is restricting.
 Overlapping between firm’s attributes and consumers
attributes.

28. Webster and wind
 partitiones the buying process into several
processes
 processes of decision-making are
determined by environmental and
organizational factors.
 Final buying process rendered as the
mixture of individual and group decision

31. example
 Automobile manufacturing
• B2B business
• Purchasing tires

32. Engel, Blackwell and Minirad (EBM)
Model:
 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:
• Input
• Information Processing
• Decision process and
• Variables influencing decision process.

34. Contd……….
 Information Input : consumer gets
information from marketing and non-
marketing sources
 Information Processing : consists of the
consumer’s exposure, attention, perception,
acceptance, and retention of incoming
information.

35. Contd………..
 Decision Process : Problem recognition,
search for alternatives, alternate evaluation
purchase, and outcomes. The central focus
of the model.
 Variables influencing the decision process :
consists of individual and environmental
influences that affect all five stages of the
decision process.

36. APPLICATIONS OF CONSUMER
BEHAVIOUR
 Improve marketing strategies by understanding
issues such as how:
• The psychology of how consumers think, feel, reason, and select
between different alternatives(e.g., brands, products)
• The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
• The behaviour of consumers while shopping or making other
marketing decisions;

37. • Limitations in consumer knowledge or information
processing abilities influence decisions and marketing
outcome;
• How consumer motivation and decision strategies differ
between products that differ in their level of importance
or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing
campaigns and marketing strategies to more effectively
reach the consumer.

38. There are four main applications of
consumer behavior:
1. MARKETING STRATEGY—i.e., for making better
marketing campaigns.
 For example, by understanding that consumers are more
receptive to food advertising when they are hungry, we learn to
schedule snack advertisements late in the afternoon.
 (1) companies that introduce new products must be well financed
so that they can stay afloat until their products become a
commercial success and
 (2) it is important to please initial customers, since they will in
turn influence many subsequent customers’ brand choices.

39. 2. PUBLIC POLICY.
e.g
 In the 1980s, Accutane, a near miracle cure for acne,
was introduced.
 Unfortunately, Accutane resulted in severe birth
defects if taken by pregnant women.
 To get consumers’ attention, the Federal Drug
Administration (FDA) took the step of requiring that
very graphic pictures of deformed babies be shown on
the medicine containers.

40. 3. SOCIAL MARKETING - Application of marketing
strategies and tactics to alter or create behaviors that
have a positive effect on targeted individuals or society
as a whole. i.e.
involves getting ideas across to consumers rather than
selling something
e.g.
 A marketing professor, went on sabbatical to work for the Centres for Disease
Control trying to reduce the incidence of transmission of diseases through
illegal drug use.
 The best solution, obviously, would be if we could get illegal drug users to
stop. This, however, was deemed to be infeasible.
 As a result, using knowledge of consumer attitudes, Dr. Fishbein created a
campaign that encouraged the cleaning of needles in bleach before sharing
them, a goal that was believed to be more realistic.

41. 4. MAKING US BETTER CONSUMERS
 for example, that if we buy a 64 liquid ounce bottle of laundry
detergent, you should pay less per ounce than if we bought two 32
ounce bottles.
 In practice, however, we often pay a size premium by buying the
larger quantity.
 In other words, in this case, knowing this fact will sensitize us to
the need to check the unit cost labels to determine if we
are really getting a bargain.
 In case of Health Drinks such as Protein Shakes there is the system
that the bulk you buy, the Cheaper it gets

42. Thank you