Basic concepts of consumer behaviour

1. Consumer Behaviour
(Total 15 No. of Basic Concepts Covered)
By
A.Raja

2.  Howard – Sheth Model Of Buying Behaviour
 Freudian Theory
 Cognitive Learning Theory
 Attitude Change
 Webster And Wind Model Of Organizational Buying Behavior
 Trait Theory
 Stages In Information Processing
 Factors Influencing Buying Behavior Of Consumer
 Ekb Model
 Social Stratification
 Consumer Perception
 Neo- Freudian Theory
 Evolution Of Consumer Behaviour
 Sheth’s Industrial Buyer Behaviour Model
 Howard Model
Concepts Covered

3. Howard - Sheth Model
 The Howard-Sheth model, serves as an integrating framework
for a very sophisticated comprehensive theory of consumer
behaviour.
 This model attempt to explain rational brand choice behaviour
of buyers within the constraints of
 Limited individual abilities
 Incomplete information
Howard – Sheth model of Buying Behaviour

4.  This model refers to three levels of Decision Making
 Extensive problem solving
 Limited problem solving
 Routinized problem solving

5. FOUR COMPONENTS INVOLVED IN THE MODEL:
 Input variables
 Output variables
 Hypothetic constructs
 Exogenous variables

6. Input Variables:
 Significative stimuli
 Symbolic stimuli
 Social stimuli
Hypothetical Constructs:
Perceptual Constructs
 Sensitivity to information
 Perceptual bias
 Search for information
Learning Constructs
 Motives
 Brand comprehension
 Decision Mediator
 Predisposition
 Inhibitor
 Satisfaction

7. Output Variables:
 Attention
 Brand Comprehension
 Attitude
 Intention
 Purchase behaviour

8. External Variables:
 Social & organizational setting
 Social class
 Culture
 Purchasing power

9. Howard - sheth model of buying behaviour

10. Freud was an Austrian psychologist, he also worked as a Medical researcher.
 He was an early user of cocaine and recommended its use as a cure for morphine
addiction.
He argued for the importance of the unconscious mind in understanding conscious
thought and behavior.
 Freud believed many people repress painful memories deep into their
unconscious mind, and couldn't be accessed when conscious.
TOPIC: FREUDIAN THEORY
SOURCE : THEORY OF CONSUMER BEHAVIOUR- DR.SRI PRAKASH, VIKAS
PUBLICATIONS

11. Freud’s conception of the human psyche :

12. 1. ID
 The ID is in charge of basic drives, the ID acts according to the
pleasure principle It seeks to avoid pain (controls life and death
instincts).
It is the dark, inaccessible part of our personality, what little we know
of it we have learned from our study of the dream-work and of the
construction of neurotic symptoms, and most of that is of a negative
character and can be described only as a contrast to the ego.

13.  EGO is a contrast to ID. It seeks to please the id’s drive in realistic
ways that will benefit in the long term rather than bringing grief.
The Ego separates what's real and helps us organize our thoughts and
make sense of them in the world around us.
 It is said, however, that the ego seems to be more loyal to the id,
preferring to gloss over the finer details of reality to minimize conflicts
while pretending to have a regard for reality.
2. EGO

14. 3. SUPER EGO
It determines what is right and wrong and steps into place of parents,
educators, teachers and people chosen to be ideal models.
It comprises that organized part of the personality structure, mainly but
not entirely unconscious, that includes the individual's ego ideals,
spiritual goals, and the psychic agency (commonly called
"conscience") that criticizes and prohibits his or her drives,
fantasies, feelings, and actions.

15. ”COGNITIVE LEARNING THEORY”
C-3

16. Learning based on mental activity is called cognitive learning.
Cognitive theory begins with human memory. It holds that learning
involves complex mental processing of information.
Sensory
input
LONGTERM
STORE
WORKING
MEMORY ( Short
term store)
SENSORY
STORE
Forgotten : lost
Rehearsal Encoding
Forgotten : lost
Forgotten :
unavailable
Retrieval
COGNITIVE LEARNING THEORY

17. INFORMATION PROCESSING :
•Consumers process product information by attributes , brands ,
comparison between these brands or combination of these factors.
•These attributes fade and eventually loss of information.
•Learning a picture takes less time than learning verbal information,
but both are important in forming an overall mental image.

18. REHEARSAL :
It is to hold information in short term storage long enough for
encoding to take place.

19. ENCODING :
It is the process by which we select a word or visual image to
represent a perceived object.
E.g.: Apple uses its stylish and distinctive insignicia.

20. •Encoding commercials is related to the context in which they are
featured.
•For example while watching television , some part of the
programme may require viewers to commit a large portion of their
cognitive resources to process.(dramatic events takes place vs.
casual conversation.

21. •When viewers commit more cognitive resources to the programme
itself , they encode and store less of information conveyed by
commercial.
•Viewers who are involved with a TV show respond more positively
to commercial advertisement tom that show and have more positive
purchase intentions.

22. Information overload:
When they are given a lot of information in a limited time.

23. RETENTION:
•Inserted information is constantly organized and re organized as
new links between chunks of information are forgot.
•As individuals gain more knowledge about a subject they expand
their network of relationship and sometimes search for additional
information.
•This process is called activation, which involves retention of new
data with old data to make material more meaningful.

24. Consumers recode what they have already encoded to include large
amounts of information called chunking.
E.g. : PC magazine and TIME.

25. Information is stored in 2 ways in long-term memory:
1. Episodically : by the order which it is acquired
2. Semantically : according to significant concepts.

26. RETRIEVAL:
•Process by which we recover information from long term storage.
•It is triggered by situational cues.
•The greater the number of competitive ads in a product category ,
the lower the recall of brand claims in a specific ad.
Eveready energiser
battery
Duracell battery

27. Applications :
A schema in long term memory offers vast scope for marketers to
develop their brand positioning.

28. ATTITUDE
 An attitude may be defined as a tendency to react
positively or negatively in regard to an object.
 According to bem,” attitudes are likes and dislikes”
 According to Engel, “attitudes are an overall
evaluation that allows one to respond in a
consistently favorable or unfavorable manner with
respect to a given object or subject”.
ATTITUDE CHANGE

29. ATTITUDE
 All sellers aims at consumer attitudes to products and
brands in order to capture high degree of sales.
 For example, in a restaurant when a customer is served
with a smile, eating out will leave pleasurable feeling
which will be reflected in the amount of tip given to
the waiter. On the other hand even though food is good
but poor service will elicit a poor tip.

30. FACTORS RESPONSIBLE FOR ATTITUDE CHANGE
 There are many factors responsible for changes in
consumer behavior and attitudes. Any change in
any of them can result in a change in attitude of
consumers.
The factors are:
 Inherent nature of consumers: There are
consumers who are rash or passive in their
decisions. The rash individual just buys products
on impulse, where the passive buyers easily lured
by attractively exhibited goods or packaging.

31. CONTI..
 Personality traits: every person has some natural
and acquired personality traits, which get reflected
in his or her purchase behavior.
 People may be divided into two broad categories as
far as personality traits concerned
 Extrovert
 Introvert

32. CONTI…
 Social influences: These are also play a major role
in affecting the attitude change of the consumer.
 These includes
 Family
 Childhood satisfaction
 Social groups
 Religion and tradition
 Lifestyles

33. STRATEGIES FOR ATTITUDE CHANGE
 It is easier to change belief rather than desired
benefits
 It is easier to change brand beliefs than brand
attitudes
 It is easier to change attitude when there is low
level of involvement with the product.
 Weak attitudes are easier to change than strong
attitudes
 It is easy to change attitudes which are based on
ambiguous information.

34.  This model explains the multifaceted
nature of organizational behavior.
 This model refers to the environmental,
organizational, interpersonal and individual
buying determinants, which influence the
organizational buyer.
Webster and Wind Model of Organizational Buying Behavior
Source: Consumer Behavior in Indian Perspective, Suja.R.Nair

35. THE ENVIRONMENTAL DETERMINANTS ARE
 Physical
 Technological
 Economic
 Political
 Legal
 Socio Cultural Environment

36. THE ORGANIZATIONAL DETERMINANTS
ARE
 Harold’s Leavitt’s four elements of buying
organization
 People
 Technology
 Structure
 Task

37. THE MODEL EMPHASIZE THE FACT THAT A
NUMBER OF PEOPLE PARTICIPATE IN THE
BUYING DECISION PROCESS INCLUDING
INDIVIDUALS AND GROUPS FROM THE VARIOUS
FUNCTIONAL AREAS IN THE ORGANIZATION.

38. THE MODEL SAYS AN INDIVIDUAL MAY BE INVOLVED IN
ONE OR MORE BUYING ROLES DURING ORGANIZATIONAL
BUYING.
 Users
 Influencers
 Buyers
 Deciders
 Gate keepers

41. EXAMPLES
 B2B Purchases
 Automobile
Manufacturing

42. A Trait is defined as “any distinguishing, relatively enduring
way in which one individual differs from another”.
Trait theorists are concerned with the construction of
personality tests that enable them to pinpoint individual
differences in terms of specific traits.
Such specific traits are:
1.Consumer innovativeness
2. Consumer materialism
3. Consumer ethnocentrism
Trait Theory
Reference:
CONSUMER
BEHAVIOUR by
LEON G SCHIFFMAN

43. Consumer innovativeness: The degree to which consumers
are receptive to new products, new services or new products.
Consumer materialism: The degree of the consumer’s
attachment to “worldly possessions”.
Consumer ethnocentrism: The consumer’s likelihood to
accept or reject foreign-made products.

44. Consumer innovators: Those who are open to new ideas and to
be among the first to try new products, services, or practices.
Personality traits that have been useful in differentiating between
consumer innovators and non-innovators include:
Consumer innovativeness
Consumer Dogmatism
Social character
Need for uniqueness
Optimum stimulation level and variety-novelty seeking.
Consumer innovativeness & Related personality traits:

45. Consumer dogmatism:
Consumer dogmatism is a personality trait that measures the
degree of rigidity that individuals display toward the
unfamiliar and toward information that is contrary to their own
established beliefs.
Social character:
Social character is a personality trait that ranges on a
continuum from inner-directedness to other-directedness.

46. Need for Uniqueness:Consumers who avoid appearing to
conform to expectations or standards of others.
Optimum stimulation level : A personality trait that
measures the level or amount of novelty or complexity that
individuals seek in their personal experiences.
Variety-novelty seeking: Measures a consumer’s degree of
variety seeking.

47. INTRODUCTION
 The information processing theory helps the
marketer to understand the processing of
advertisement information by the human brain.
 Every individual differ in terms if information
processing i.e, how they perceive information , how
information is retained , recalled and so on.
STAGES IN INFORMATION PROCESSING

48. CONT...
Information processing explains about two
important aspects,
 The cognitive ability of a customer during
information processing.
 The complexity and nature of information being
processed.

49. STAGE IN INFORMATION PROCESSING
SENSORY STORE:
 Data gathered by a customer comes from different senses.
 The information is received in the form of images.
 If the customer brain perceives the information is
valuable it is tagged and sent into short term store or the
images are lost and forgotten.

50. SHORT TERM STORE:
 Also known as working memory.
 Images are held for brief period of time.
 If customer perceives the information to be useful it is
transferred to long term store. This transfer process is
called rehearsal.
 The transfer of information takes about 2 to 3 seconds.

51. LONG TERM STORE:
 It is permanent and most powerful store house of
customer brain.
 Unlike the short term store , the information can be stored
for a longer period of time i.e, four weeks, months or
many years.

52. REHEARSALAND ENCODING:
 The purpose of rehearsal is to hold information in short
term storage long enough for encoding to take place.
 Encoding is a process by which we select a word or visual
image to represent a perceived object
.
RETENTION:
 Information does not just sit in long term storage waiting
to be retrieved it should be organised and re-organised
for effective retention.

53. RETRIVAL:
 It is the process by which we recover information from long
term storage
 Consumers likely to spend more time interpreting and
elaborating on information they find relevant to their needs.
INTERFERENCE:
 Interferences are mainly caused by confusion with competing
ads and make information retrieval difficult.
 Greater the number of competetive ads in product category,
lower the recall of specific brand.

54. “Consumer behaviour is the process and activities
people engage in when searching for selecting, purchasing, using,
evaluating and disposing of products and services so as to satisfy
their needs and desires.”
Belch & Belch
: Factors influencing buying behavior of consumer

55. Factors influencing buying behaviour of
Consumer:

56. Cultural factors

57. Social factors

58. Personal factors

59. Psychological factors

60. EKB MODEL
The Engel-Kollet-Blackwell model of consumer behaviour also
known as the Engel-Black-Minard model was originally designed to
serve as framework for organizing the fast –growing body of
knowledge concerning consumer behavior.
The model consists of four stages:
Information input
Information process
Decision process
Variables influencing the decision process
REFERENCE:
CONSUMER BEHAVIOUR
IN INDIAN PERSPECTIVE
BY
SUJA R. NAIR

62. INFORMATION INPUT:
Input includes all kinds of stimuli from our contact with the world
around us:
Our experiences
 contact with others Marketer-controlled stimuli (e.g., advertising,
store display)
 Other stimuli (e.g., personal recollections, conversations with
friends),
External search

63. INFORMATION PROCESSING:
This components comprises the consumer’s selective exposure,
attention, comprehension and retention of stimuli relating to a
product or brand received from marketing sources.
The consumer is exposed to stimuli (and the accompanying
information);attention determines which of the stimuli he will focus
upon; Thereafter he would interpret and comprehend it, accepts it in
his short term memory and retains it by transferring the input to
long-term memory

64. DECISION PROCESS:
It is triggered at any time during information processing
 It consists of five steps :
Problem recognition
Search
Alternative evaluation
 Choice
 Outcomes (post-purchase evaluation and behavior

65. DECISION PROCESS VARIABLES:
The model proposes individual influences that affect the various
stages of the decision making process. Individual characteristics
include constructs like demographics, motives, beliefs, attitude,
personality, values, lifestyle etc.

66. EXTERNAL INFLUENCES:
Consumers are influenced by environmental factors like culture,
sub-culture , social class , reference groups, family and situation

67. MEANING
Social stratification refers to the perceived hierarchies in
which consumer’s rate others as higher or lower in
social status. Those who earn a higher status due to
work or study have achieved status, whereas those
who are lucky to be born wealthy ascribed status.
Social Stratification

68. DEFINITION
‘Social stratification is a distinction based on the status of
community members it has’
-- Mosca

69. DETERMINANTS OF SOCIAL STRATIFICATION
Income
Occupation
Education

70. FORMS OF STRATIFICATION
 Estate system
 Caste system
 Class system

71. GLOBAL STRATIFICATION
Countries stratified into 3 levels
 Core(wealthy, highly developed, slow population growth
and high standarad of living)- u.s. and europe
 Periphery (Poor, less developed, rapid population and
low standard of living)- Africa
 Semi periphery (Beginning to Develop)- India and
China

72. WHAT DO YOU UNDERSTAND BY THIS PICTURE?
72
“Consumer behavior concepts
applications and cases” by ms
raju
Consumer perception

73. MEANING OF PERCEPTION
 Perception may be defined as the process by
which an individual selects, organizes and
interprets stimuli into a meaningful and coherent
picture of the environment in which he lives.
73

74. FACTORS INFLUENCING PERCEPTUAL
SELECTIVITY
74
Factors in the
perceiver
 Needs and motives
 Self concept
 Past experience
 beliefs
 Expectations
Factors in the target
 Size
 Intensity
 frequency

75. Needs and motives :peoples perception is determined by their
inner needs .A need is a feeling of tension or discomfort when
one thinks he I missing something or requires something
.People with different needs usually experience different stimuli
similarly people with different needs select different items to
remember of respond to.
Beliefs: a persons beliefs have profound
influence on this perception thus a fact is
conceived not on what is but what a person
believes it to be. the individual normally censors
stimulus inputs to avoid disturbance of his
existing beliefs

76. 76
Size:
A larger object is more likely to be noticed
than a smaller object.
Example:
Which you can read fast?
God is great God is great
External Attention Factors

77. 77
EXTERNAL ATTENTION FACTORS
Intensity
According to the intensity principle of attention, the
intensity of an external stimulus determines its
probability of being perceived.
Example:
Light Colour Bright Colour

78. INTRODUCTION:
“Personality can be defined as those inner
psychological characteristics that both determine and reflect
how a person responds to his or her environment.”
Many psychologists rejected Freud’s id based theory
of personality, some reasoned that the individual develops a
personality through numerous attempts to deal with others
in a social setting.
These social theorists, sometimes collectively called
as Neo- Freudian school.
Neo- Freudian Theory
Source: David L. Loudon & Albert J. Della Bitta “Consumer Behavior”

79.  Many psychologists, scientists, and philosophers have
made meaningful additions to the psychoanalytic study of
personality.
 Four particularly notable Neo-Freudians are
• Alfred Adler
• Erik Erikson
• Carl Jung
• Karen Horney
 These Neo- Freudians agreed with Freud that childhood
experiences matter; however, they expanded on Freud's ideas
by focusing on the importance of sociological and cultural
influences in addition to biological influences.

80.  According to Adler, we are motivated to overcome feelings
of helplessness that begin in infancy.
 Erik Erikson said that ego performs constructive function.
Goals of ego include establishing identity and satisfying need
for mastery over environment.
 Jung stated that the roots of personality go back to the
dawn of human existence and are contained in a collective
unconscious.
 Karen Horney’s theories focused on "unconscious anxiety,"
which she believed stemmed from early childhood
experiences of unmet needs, loneliness, and/or isolation.

81.  A Neo- Freudian approach was based on the theoretical
scheme of Karen Horney.
 Horney identified ten major needs which are acquired as a
consequence of individuals attempting to find solutions to
their problems in developing a personality and dealing with
others in asocial environment.
 These ten needs were then classified into three major
orientations like
• Compliant
• Aggressive
• Detached

82. Compliant Orientation:
 These individuals move towards people and stress the
need for love, approval, modesty, and affection.
 These individuals tend to exhibit large amount of empathy
and humility and are unselfish.
 These type of individuals prefer known brand names and
use more mouthwash and toilet soaps.

83. Aggressive Orientation:
 Those who move against people and stress the need for
power, strength, and ability to manipulate others.
 They prefer specific brands so that they can noticed.
Detached Orientation:
 Those who move away from people.
 These individuals stress the need for independence, freedom,
and self-reliance in their dealings with others
 These types appear to have the least awareness of brands.

84. Consumer behaviour is the process and activities people engage
in when searching for,selecting,purchasing,using,evaluting and
disposing of products and services so as to satisfy their needs
and desires.
consumer behaviour
evolution of consumer behaviour

85. evolutionof consumer behaviour
1.Classical thought
2.Mangerial school of thought
3.Behavioural school of thought

86. 1.Classical thought
The classical thought of marketing is based on the commoditization
and differentiation of the products functional aspects of marketing
that focused on the activities inherent on marketing to reach the
goods and products to consumer and on the agent involved in
marketing dealings.

87. 2.Managerial school of thought
Managerial school of thought relied on social, sciences to defines
and explain consumer behaviour. This school also borrowed from
managerial economics, with an emphasis on controlling the
behaviour of the market. it relied on most recent concepts of
managerial economics on moved away from the micro economics
of demand theory.

88. 3.Behavioural school of thought
Behavioral aspect of the consumer that actually acted on him in
this decision making had still not been explored to assess the
psychological aspects and impact of external influences on the
consumer behaviour.
It was necessary to make the individual consumer the focus
point on order to understand and study his behaviour.
At this stage diverse branches of psychology started exploring
into the different behavioral aspects of consumer

89. INDUSTRIAL BUYING MODELS
WEBSTER and WIND model
SHETH’S INDUSTRIAL BUYER BEHAVIOUR MODEL
SHETH’S INDUSTRIAL BUYER BEHAVIOUR MODEL
REFERENCE:
CONSUMER BEHAVIOUR IN INDIAN PERSPECTIVE
BY
SUJA R. NAIR

90. SHETH’S INDUSTRIAL BUYER BEHAVIOUR
MODEL

91. Four main factors
The expectations of the individuals making up the DMU
The characteristics of both the product and the organization.
The nature of the Decision making process

92. Expectations with in the organisation
Various source of information
Perceptual distortion.
Persons pervious experience
 Active search

93. Characteristics of both the product and the
organization
Product specific factors:
Perceived risk
Time pressure
Type of purchase

94. The characteristics of both the product and the
organization
Company specific factors:
Organizational Orientation
Organizational size
Degree of Centralization

95. Nature of decision making process
Problem solving
Persuasion
Bargaining

96. Consumer Buying Behavior Defined
Consumer buying behavior is the sum total of a consumer's attitudes,
preferences, intentions, and decisions regarding the consumer's behavior in the
marketplace when purchasing a product or service.
The study of consumer behavior draws upon social science disciplines of
anthropology, psychology, sociology, and economics.
The study of consumer behavior focuses on how individuals make decisions
to spend their available resources (time, money, effort) on consumption-related
items.
Consumer behavior involves the use and disposal of products as well as the
study of how they are purchased.
Howard model

97. Howard model
Howard model is recent cognitive model of buying behavior is along the lines
of dretsks.
Howard’s model measures the consumer’s precept by recall ,which makes
information all that is recalled about the stimulus.
Howard model
Extensive problem
solving
limited problem
solving
Routine problem
solving

98. Elements of Howard’s consumer decision model
Information
Brand recognition
Attitude
Confidence
Intention
purchase

99. Extensive problem solving
The concept of product hierarchy is fundamental .it implies that the consumer
has yet to form a concept of the product class or category. Making/Complex
high involvement, unfamiliar, expensive and/or infrequently bought products.
Examples include cars, homes, computers, education. Spend a lot of time
seeking information and deciding.
Limited problem solving
Once a new brand is put into a product category knowledge of the product
category guides the process leading to intention and purchase .the consumer
does have a concept of the product category but has yet form a concept of the
new brand falling into a familiar product category.
Examples include Clothes--know product class but not the brand.
Decision states of Buyer Behaviour

100. Routine problem solving
Under RPS a well informed consumer may undertake little or no deliberation
,so information can lead directly to intention to buy . but many in RPS are not
just creatures of habit but switch brands . consumer has formed both a concept
of the product category and a concept of each of the relevant brands