F010402T :Consumer Behaviour

Unit-1

Axis Institute Of Planning & Management, Kanpur 1

What is a consumer behaviour model
• Consumer behavior models are instrumental for understanding how,
when, and why your customers buy.
• By applying the models to your customer acquisition efforts, you can
accurately predict who will buy your product and target the right
customers at the right time.

Axis Institute Of Planning & Management, Kanpur 2

• A consumer behaviour model is a theoretical framework for explaining
why and how customers make purchasing decisions.
• The goal of consumer behaviour models is to outline a predictable map
of customer decisions up until conversion, thus helping you steer every
stage of the buyer’s journey.
• Consumer behaviour models may sound complicated, but they’re not.
They’re a way to create a “buyer behaviour story” that you can use to
refine and improve your customer experience.

Axis Institute Of Planning & Management, Kanpur 3

• As a whole, buyer behavior refers to an individual's buying habits
based on influences from their background, education, personal
beliefs, goals, needs, desires, and more.
• Businesses aim to understand buyer behavior through customer
behavior analysis, which involves the qualitative and quantitative
analysis of a target market.
• Even though this data can tell you your customer’s favourite brand of
socks, it doesn’t mean much if it doesn’t tell you why they purchased
that brand of socks.
• That’s where consumer behavior models come in. Consumer behavior
models contextualize results from customer behavior analysis studies
and help you get to the “why” of purchasing decisions.

Axis Institute Of Planning & Management, Kanpur 4

 TRADITIONAL CONSUMER BEHAVIOR MODELS

Traditional behavior models were developed by economists hoping to

understand what customers purchase based on their wants and needs.
Traditional models include the following:
• Learning Model
• Psychoanalytical Model
• Sociological Model
• Economic Model

Axis Institute Of Planning & Management, Kanpur 5

1. Learning Model of Consumer Behavior

Axis Institute Of Planning & Management, Kanpur 6

• The Learning Model of customer behavior theorizes that buyer
behavior responds to the desire to satisfy basic needs required for
survival, like food, and learned needs that arise from lived
experiences, like fear or guilt.
• This model takes influence from psychologist Abraham Maslow’s
Hierarchy of Needs.
• The bottom level of this hierarchy represents basic needs, and
ascending sections describe learned needs, or secondary desires, that
allow consumers to feel as though they’ve reached self-fulfilment.

Axis Institute Of Planning & Management, Kanpur 7

• The Learning Model says that consumers first make purchases to satisfy
their basic needs and then move on to meet learned needs.
• For example, a hungry customer would fulfill their need for food before
a learned need to wear trendy clothing.

Axis Institute Of Planning & Management, Kanpur 8

2. Psychoanalytical Model of Consumer Behavior

Axis Institute Of Planning & Management, Kanpur 9

• Sigmund Freud is the father of psychoanalysis.
• The psychoanalytical model draws from his theories and says that
individual consumers have deep-rooted motives, both conscious and
unconscious, that drive them to make a purchase.
• These motives can be hidden fears, suppressed desires, or personal
longings.
• Thus, customers make purchases depending on how stimuli from your
business, like an advertisement on Instagram, appeal to their desires.
• It’s important to note that, since these desires can be unconscious,
customers don’t always know why it appeals to them; they just know
it feels right to have it.

Axis Institute Of Planning & Management, Kanpur 10

• This model is unique in terms of application, but it’s relevant to
businesses that sell an image that accompanies their products or
services.
• For example, say you sell glasses. We all long to fit in and feel like
we’re valued and seen as capable, smart people. Glasses are sometimes
a symbol of intelligence, so you’d want to appeal to this desire when
crafting a customer experience.
• You may instruct marketing to create ad campaigns that display
pictures of people wearing your glasses in educational settings or
doing things that society labels as ‘smart.’

Axis Institute Of Planning & Management, Kanpur 11

3. Sociological Model

Axis Institute Of Planning & Management, Kanpur 12

• The Sociological Model of consumer behavior says that purchases
are influenced by an individual's place within different societal
groups: family, friends, and workgroups, as well as less-defined
groups like Millennials or people who like yoga.
• An individual will essentially purchase items based on what is
appropriate or typical of the groups they’re in.
• This model can apply to most businesses, especially those that
create products and services relevant to specific groups.
• To use the Sociological Model, you’d want to create experiences
that speak to how these groups usually act.
• One example is brands that sell exercise equipment.
Axis Institute Of Planning & Management, Kanpur 13
• Check out this ad from Nike. They’re selling this shoe to the
undefined group of people who like to run, claiming that it will
improve their speed and help them fit in with the group.

Axis Institute Of Planning & Management, Kanpur 14

4.Economic Model of Consumer Behavior

Axis Institute Of Planning & Management, Kanpur 15

• The economic model of consumer behavior is the most
straightforward of the traditional models.
• This model argues that consumers try to meet their needs while
spending as few resources (e.g. money) as possible.
• That means that businesses and manufacturers can predict sales based
on their customers’ income and their products’ price.
• If companies offer the lowest-priced product, they may feel that
they’re guaranteed a consistent level of profit.

Axis Institute Of Planning & Management, Kanpur 16

 Contemporary Models
Contemporary models of consumer behavior focus on rational and
deliberate decision-making processes rather than emotions or unconscious
desires. The contemporary models include:
1. Engel-Kollat-Blackwell (EKB) Model
2. Black Box Model
3. Hawkins Stern Model
4. Howard Sheth Model
5. Nicosia Model
6. Webster and Wind Model
Axis Institute Of Planning & Management, Kanpur 17
1. Engel-Kollat-Blackwell (EKB) Model of Consumer Behavior

Axis Institute Of Planning & Management, Kanpur 18

The Engel-Kollat-Blackwell model of consumer behavior outlines a
five-stage decision process that consumers go through before purchasing
a product or service.
• Awareness: During this stage, consumers view advertisements from a
business and become aware of their need, desire, or interest, to
purchase what they've just discovered.
• Information Processing: After discovering a product or service, a
consumer begins to think about how the product or service relates to
their past experiences or needs and whether it will fulfill any current
needs.
• Evaluation: At this point, consumers will research the product they’ve
discovered and research options from competitors to see if there is a
better option or if the original product is the best fit.
Axis Institute Of Planning & Management, Kanpur 19
• Purchasing Decision: A consumer will follow through with a purchase for
the product that has beat out competitors to provide value. A consumer may
also stop the process if they change their mind.
• Outcome Analysis: After making a purchase, a customer will use what
they’ve bought and assess whether their experience is positive or negative.
After a trial period, they’ll keep a product and maybe decide to become
repeat customers or express dissatisfaction and return to stage three.
Overall, EKB says that consumers make decisions based on influencing
factors that they assess through rational insight.
This model applies to businesses that have many competitors with similar
products or services. If your product market is highly saturated and
competitive, the goal is to outshine your competitors by meeting customers
at every stage of their journey.

Axis Institute Of Planning & Management, Kanpur 20

2. Black Box Model of Consumer Behavior

Axis Institute Of Planning & Management, Kanpur 21

• The Black Box model, sometimes called the Stimulus-Response model,
says that customers are individual thinkers that process internal and external
stimuli to make purchase decisions.
• It may look complex, but it’s a fairly straightforward path. A consumer
comes into contact with external stimuli from your business’ marketing mix
and other external stimuli, and they process it in their mind (black box).
• They relate the external stimuli to their pre-existing knowledge, like personal
beliefs and desires, to make a decision.
• In short, this model says that consumers are problem solvers who make
decisions after judging how your product will satisfy their existing beliefs
and needs.
• Since consumers only follow through with a purchase after understanding
how a product relates to their experiences, this model can benefit businesses
selling products that go along with a lifestyle.
Axis Institute Of Planning & Management, Kanpur 22
• Case in point: cars. Different brands sell their cars to specific types of
buyers.
• Jeeps and Subarus are for those that engage in outdoor activities and
need a sturdy, reliable vehicle.
• At the same time, Mercedez Benz and Lexus’ are marketed to those who
want luxurious driving experiences.
• Even though the machinery is relatively similar, these brands speak to
the pre-existing life values that customers have, and they promise that
purchasing their vehicle will uphold their values.

Axis Institute Of Planning & Management, Kanpur 23

3. Hawkins Stern Impulse Buying Model

Axis Institute Of Planning & Management, Kanpur 24

• The Impulse Buying theory is an alternative to the Learning Model and
EKB, as it claims that purchases aren’t always a result of rational
thought.
• When we think of impulse buying, we typically imagine picking up a
candy bar or a pack of gum right before checking out.
• These are certainly impulse purchases, but categorizes them into four
different types:
• Escape Purchase: Sometimes called pure impulse, this involves
purchasing an item that isn’t a routine item or on a shopping list.
Consumers are drawn to these items through appealing visuals.
• Reminder Purchase: A consumer makes a reminder impulse purchase
when they come across a product through in-store setups, promotional
offers, or a simple reminder that a product exists, like a strategically
placed ice cream scoop in the freezer aisle of a grocery store.
Axis Institute Of Planning & Management, Kanpur 25
• Suggested Purchase: Suggested impulse purchases occur when a
consumer is made aware of a product after a recommendation or
suggestion from an in-store salesperson or online algorithms.
• For example, seeing an ad that says, “Other people who bought this
shoe you’re about to buy also purchase these socks.”
• The consumer didn’t know the socks existed, didn’t plan to buy them,
but now the suggestion has told them that they need them.

Axis Institute Of Planning & Management, Kanpur 26

• Planned Purchase: Although planned is the opposite of impulse, these
purchases occur when a consumer knows they want a particular
product but will only buy it if there is a deal involved. An unexpected
price drop could lead a customer to make a planned impulse purchase.
• The Hawkins Stern Model applies to most businesses, as there are no
limits to what a customer with this purchasing behavior will buy.
Create a tailored customer experience by putting care into product
displays, creating AI algorithms for online shopping, or placing items
on sale to appeal to your shoppers who are planned purchase impulse
buyers.

Axis Institute Of Planning & Management, Kanpur 27

4. Howard Sheth Model of Buying Behavior

Axis Institute Of Planning & Management, Kanpur 28

• The Howard Sheth model of consumer behavior posits that the buyer’s
journey is a highly rational and methodical decision-making process.
• In this model, customers put on a “problem-solving” hat every step of the way
— with different variables influencing the course of the journey.
• According to this model, there are three successive levels of decision-making:
• Extensive Problem-Solving: In this stage, customers know nothing about the
product they’re seeking or the brands that are available to them. They’re in
active problem-solving mode to find a suitable product.
• Limited Problem-Solving: Now that customers have more information, they
slow down and begin comparing their choices.
• Habitual Response Behavior: Customers are fully aware of all the choices
they have and know which brands they prefer. Thus, every time they make a
purchase, they know where to go.

Axis Institute Of Planning & Management, Kanpur 29

Let’s look at an anecdotal example.
• When I first started buying glasses online, I had no idea which
retailers I should use or whether the glasses sold online would be the
same quality as the opticians’ offerings.
• I searched online to find a high-quality online glasses retailer
(extensive problem-solving).
• I found a few choices and started comparing them from both a pricing
and quality standpoint (limited problem-solving). I eventually chose
one, and that’s the retailer I’ve used ever since (habitual response
behavior).
• But these stages aren’t that simple. According to the Howard Sheth
model, I was under the sway of several stimuli during this process:
Axis Institute Of Planning & Management, Kanpur 30
• Inputs: This refers to the marketing messages and imagery a consumer
receives while they’re going through the decision-making process.
“Inputs” also refers to any perceptions and attitudes that come from the
consumer’s social environment, such as their friends, family, and
culture.
• Perceptual and Learning Constructs: This may sound complicated,
but this stimulus is simply the customer’s psychological makeup and
psychographic information. Perceptual and learning constructs may
include needs, preferences, and goals.
•.

Axis Institute Of Planning & Management, Kanpur 31

• Outputs: After inputs and perceptual and learning constructs are
mixed together, you get the output. The output is the customer’s
resulting action under the influence of marketing messages, social
stimuli, and internal psychological attributes. It can result in the
customer paying more attention to a certain brand over another.
• External Variables: This is anything that’s not directly related to the
decision-making process, such as weather or religion, that still may
sway the customer’s decision

Axis Institute Of Planning & Management, Kanpur 32

5. Nicosia Model

Axis Institute Of Planning & Management, Kanpur 33

• The Nicosia Model places emphasis on the business first and the consumer
second.
• It argues that the company’s marketing messages determines whether customers
will buy. Simple, right?
• While it’s an attractive model because it places all the power on businesses, it’s
unwise to ignore the customer’s internal factors that lead to a purchase decision.
• In other words, while you may offer the wittiest and most effective marketing
copy ever, a customer’s internal attributes may have more sway in some instances
over others.
• The model is comprised of four “fields”:
• One: The business’ characteristics and the customer’s characteristics. What
does your marketing messaging look like? And what’s your customer’s perception
of that messaging? Are they predisposed to be receptive to your message? The
latter is shaped by the customer’s personality traits and experiences.

Axis Institute Of Planning & Management, Kanpur 34

• Two: Search and evaluation. Similar to the Howard Sheth model’s
“limited problem-solving” stage, the customer begins to compare
different brands here based on the company’s messaging.
• Three: Purchase decision. The purchase decision will occur after the
company convinces the customer to choose them as their retailer or
provider.
• Four: Feedback. During the feedback field, the company will
determine whether it should continue using the same messaging, and
the customer will decide whether they will continue to be receptive to
future messages.

Axis Institute Of Planning & Management, Kanpur 35

6. Webster and Wind Model of Organizational Buying
Behavior

Axis Institute Of Planning & Management, Kanpur 36

• The Webster and Wind Model is a B2B buying behavior model
that argues there are four major variables that affect whether an
organization makes a purchase decision. Those are:
• Environmental Variables: Environmental variables refer to any
external factors that could sway a purchase decision. Customer
demands, supplier relationships, and competitive pressure are a few
examples. Broader variables apply, too, such as technology, politics,
and culture.
• Organizational Variables: Organizational variables refer to internal
factors that could sway a purchase decision, such as the
organization’s goals and evaluation criteria.

Axis Institute Of Planning & Management, Kanpur 37

• Buying Center Variables: Who makes the final purchase decision?
Who has the authority to sign the contract, and who influences the
buying process? Buying center variables take all of this into account.
• Individual Variables: These variables refer to the demographic
and psychographic information of the individual prospect at the
business. What’s their education and level of experience? What are
their goals and desires?
• After taking all of those variables into account, B2B organizations
are then able to chart a predictable buyer’s journey for their target
customers.

Axis Institute Of Planning & Management, Kanpur 38

Consumer Behaviour Research:

• Definition of Consumer Behaviour Research:

Axis Institute Of Planning & Management, Kanpur 39