CONSUMER BEHAVIOUR

MODELS OF CONSUMER BEHAVIOUR

A. Economic Model of Consumer Behaviour

Marshall explains Consumer behaviour in Economics Terms. This is a classical Economic Perspective Assumptions
Consumer is : a. Economic b.Discerning c. Continually Looking for Monetary Advantage d. Rational e. Prudent

A. Economic Model of Consumer Behaviour--Contd

Economists always think in terms of allocation of limited resources over an available set of Products at given prices Economists presume that the Consumer always follows the Principle of UTILITY MAXIMISATION IN A Rational manner. This implies that:
The consumer is aware of all possible solution alternatives The customer is capable of correctly ranking each alternative in terms of benefits, advantages, shortcomings/disadvantages. The customer is able to identify the best alternative. Satisfaction===Percieved Utility/Price This means that if the perceived utility remains the came, Lower the Price, Greater the satisfaction

This is not true in reality and hence, Perfect Decisions are not possible. Customer looks beyond prices while buying a product.

A. Economic Model of Consumer Behaviour-Limitations

People have limitations in assessing utility People have pre-conceived notions People are influenced by other peoples behaviours and experience People have limited knowledge A large number of non-price factors play a role in satisfaction
For Example: Service Guarantees Warrantees Brand Image Brand Loyalty Peer Group Influence Snob value Conspicuousness of the Product Possibility of Ridicule

Model is too simplistic and idealistic and probably valid where there are very very limited choices

B FREUDIAN MODEL OF CONSUMER BEHAVIOUR

This Model is based on Freuds Psycho Analysis Approach Freud stipulates that the Consumer is constituted with several :
Feelings Complexities Complexes

Freud tries to connect childhood and other experiences of individuals to explain Consumer Behaviour. These may be:
Guilt, Fear, Desires, Power, Lack of Power, feeling of Being Cheated, feeling of being Dominated, feeling of being bullied Influenced by the above, consumers may be rational or totally irrational. This may result in sudden changesin behaviour, brand change, impulse purchase

B FREUDIAN MODEL OF CONSUMER BEHAVIOUR---Contd.

Freud gives the following example A man who drove majestically in a beautiful high priced car had not purchased the car as a mode of transport BUT the beautiful car was in fact symbolic of his dominating mistress. He did not have control over his mistress. The purchase of the elegant car war related to satisfying a deep seated desire to dominate. If one was cheated by somebody, the customer is always suspicious. E. G. Taxi Drivers image If you were bitten by a dog in your childhood, you are always scared of dogs. Fear of darkness Fear of the unknown and the different--Xenophobia

C. Pavlovian Model also called the learning Model

Pavlov looks at Consumer behaviour in terms iof EFFORT-REWARD Relationship Any purchase Behaviour that brings, rewards, Approval, Recognition, Commendation, Praise is generally likely to be repeated and the belief gets reinforced. REPEAT PURCHASE IS THE RESULT. Happy memories also lead to repeat purchases.

Over delivering on promise leads to repeat purchase

Anything that brings embarrassment, ridicule is strongly rejected. Unpleasant memories are stored to protect oneself from falling a victim to misleading adverts, beguiling salespersons that promised too much but failed to deliver or delivered much less than promise. Customer is in a learning mode and hence willing to listen.

The Model is of great relevance to B 2 B Marketing and Services marketing.

D. HOBBESIAN MODEL
This model essentially explains Industrial of B 2 B Purchasing. Four Factors that are Considered by this model to explain Consumer behaviour. First Factorpersonal factors

EGO Organizational Politics One-upmanship Stature Security Prestige within the Organisation PROMOTIONS Monetary benefits Recognition

D. HOBBESIAN MODEL-Contd
Second Factor How the Purchase satisfies Organisational Needs Low Cost Quality Delivery Credit Terms Better Yields Better Quality of Companys Finished Goods

D. HOBBESIAN MODEL--Contd
Third factor
Level of Self Confidence the Purchase would induce.

Fourth factor
Risk involved in making a specific Purchase decision. Risk Aversion

Fear of Failure

VEBLENIAN MODEL
Combination of PSYCHO SOCIAL INFLUENCES Products and services are bought by affluent buyers not because they serve any immediate need or purpose but are ornamental designs for some deep seated desire for EGO satisfaction and pssible to overcome a sense of insecurity. Generally valid for very high involvement Conspicuous items such as:
Paintings Diamonds Yachts High End cars Horses

In some cases, these items are even purchased on impulse

F. MASLOWS THEORY OF HIERARCHY OF NEEDS

DISSATISFACTION leads to TENSION leads to STIMULATION OF ACTION TO REDUCE TENSION Strength of Need is directly proportional to Amount of Tension. Amount of tension is a function of Length of Time till satisfaction and nature of need. The longer the need has remained unsatisfied, Greater is the tension.

These needs are more important in determining the Consumer Behaviour than those needs that are recently satisfied.
Stronger needs produce more Tension and must be satisfied

F. MASLOWS THEORY OF HIERARCHY OF NEEDS

5. Self Actualization---Be On Cloud nine

4. Esteemvaluation of Self By others 3. Love and belonging---To love and Be cared for

2.Safety Needs--- Physical safety and Security

1.Physiological Needs Food, shelter, Clothing, water, sleep, sex