models cb.pdf

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Consumer decision makingmodels



Sociological Models



Nicosia Model of

consumer behaviour •Proposed by Francesco M.

Nicosia in the 1970s

•The model concentrates on the

communication process that

occurs between a brand and aconsumer



Explain the complex decisionprocess that consumers engage

in during purchase of new

products

Dynamics involved in decision

making

Decision aiming was presented

as a series of decisions



• Model describes a circular flow of

influences.

• Each component provides input to the

next.



• Four components of model

– Firm‟s attributes, communications and

consumer‟s pyschological attributes.

– Consumer‟s search for evaluation of

alternatives

– Consumer‟s motivated act of purchase

– Consumer storage or use of the product



1.Marketer's communication affecting consumers‟

attitude

TV, newspaper, websites, personally



2. Consumer's search and evaluation: Motivation

3. Purchase action

4. Consumption experience and feedback : Memory



Howard-Sheth Model of Buying behaviour



•Given by John Howard and Jagdish Sheth in

1969.

•Tried to explain buyer rationality while makingpurchase decisions even in conditions of

incomplete information

•Differentiated between three levels of decisionmaking, EPS, LPS and RPS



The model has four major components

•Stimulus inputs (input variables)

•Hypothetical constructs

•Response outputs (output variables)

•Exogenous variables



Stimulus inputs (Input variables)

•Informative cues about the product/service

offering

•Information cues could relate to quality,

price, distinctiveness, service and availability

•The informational cues could be

Significative, Symbolic, and Social.



Engel-Blackwell-Miniard Model

• Developed originally in 1968 by

Engel, Kollat, and Blackwell.

• Later on Miniard contributed few

attributes in it.



• Five activities of decision process occuring

over a time period:

– Motivation and need recognition

– Search for information

– Alternative evaluation

– Purchase

– outcomes



• Model variables grouped into four general

categories:

– Stimulus inputs

– Information processing

– Decision process

– Variables influencing the decision process



• Arrows in the model depicts major

directions of influence.

• Authors recognized two significantly

different modes of operation by

consumers.• Extended problem solving behaviour (EPS)

• Low problem solving behaviour



• Information search• Individual characteristics (Risk taking ability)

• Environmental influences (urgency of need)



• Acceptance or info processing• Acceptance (Comparison to evaluative criteria and

existing beliefs)

• Retention

Evaluation of criteria result in :

Beliefs

Attitudes

Intentions

Need Environmental



Stimuli

Marketing

Dominated

Non-

Marketing

Dominated

Exposure

Attention

Comprehension

Acceptance

Retention

External Search

Dissatisfaction

Memory

Internal

Search

Need

Recognition

Search

Pre purchaseevaluation

Purchase

Consumption

Post

Consumption

evaluation

Divestment

Satisfaction

Influences:

Culture

Social class

Personal

influences

Family

situation

Individual

influences:

Consumer

resources

MotivationKnowledge

Attitudes

Personality

Lifestyledemographi

cs



Bettman's Information Processing Model of

Consumer Choice (1979)

• Introduces in 1979

• Consumer is central to a host of

information processing activities.

• Receives a large amount of information

externally from the marketer,

competitors and the environment.

• Has a large store of information within

him as a database that he builds over

time from his learning, experiences,

social influences



• With a huge amount of information

that he is exposed to, the processing

becomes difficult and unmanageable.

• But consumers‟ possess a limited

capacity for processing information.

• So consumers use certain simplifying

strategies to process information

• Use simple decision rules for specific

situations



• The consumer information process is

depicted through several flowcharts.

• Which depict the various components of

the model and the interrelationships

between them



• main components of the model are:

– Processing capacity

– Motivation

– Attention

– Information

– Acquisition

– Evaluation

– Decision process

– Consumption

– learning processes

St N 1 P i



Stage No. 1: Processing

capacity

• Consumer has limited capacity for

processing information.

• Consumers are not interested in complex

computations and extensive information

processing.

• Consumers are likely to select choice

strategies that make product selection an

easy process.



• Try to bypass their limits by being

selective towards informationreceptivity

– ignoring certain information that they

consider irrelevant or in

comprehendible

–prioritizing information that is

re uired and is in use



Stage No. 2: Motivation

• Motivation is located in the center of Bettman model.

• Influence both the direction and theintensity of consumer choice for more

information while deciding.

• There exists a hierarchy of goals‟

mechanism that provides different sub-

goals to simplify the choice selection



• Consumers own experience in a

specific area of market and he doesn‟t

need to go through the same hierarchyevery time to arrive at a decision.

• Converts the non-action or passive

inputs in the consumers into action

outputs or active behavior.

• No concern was given on religious

motives.



Stage No. 3: Attention and

perceptual encoding

• Voluntary attention- conscious allocation of

processing capacity to current goals or

When a consumer actively/consciously seeks attention

to achieve his goals.

• Involuntary attention- automatic response to

disruptive events (e.g., newly acquired complex

information)

Short term attention that he provides before deciding

whether he should process the information that he has

been exposed to.



• The perceptual encoding accounts for

the different steps that the consumer

needs to perceive the stimuli and whether

he needs more information. – Person integrates the information that he has

processes into his already existing perceptual

network or database



• Based on perceptual encoding and the

database, the consumer decides on the

need and the quantum of marketing

information that he needs to process.

• This leads to the scanner and interrupt

mechanisms and the resultant

responses. The scanner and interruptmechanisms act like on and off switches

for a consumer.

S f



• Insufficient Information in database:

Searching, Attention, Reception.

• Sufficient Information: Information

process gets interrupted.

• Newly acquired information is

evaluated and its suitability or

usefulness is assessed

Stage No. 4: Information

acquisition and evaluation



• After acquiring information, the consumer

evaluates the information for utility and

sufficiency, and then moves on to make

decision choices.

• Cost-benefit analysis of information with

time, efforts and money.



Stage No. 5: Memory

• In this component the consumer keeps

all the information he collects.

• It will be the first place to search when

he need to make a choice.

• Insufficient information in memory will

lead to external search.



Stage No. 6: Decision Process

• This component deals with theapplication of heuristics or rules of

thumb, which are applied in the

selection and evaluation of specificbrand.

• Heuristics- Influenced by both individualfactors (e.g., personality differences)

and situational factors (e.g., urgency of

the decision).



• Thus it is unlikely that the same decision

by the same consumer will apply in

different situation or other consumer in

the same situation.

• If the purchase is a routine purchase, the

decision making is faster and oftenrepeat; in other cases, it may take time.

Stage No 7: Consumption and



Stage No. 7: Consumption and

Learning Process

• Future results after the purchase.

• Consumer gained experience.

• Experience provides information.

• Information becomes memory.

• Affects future behaviour.

A A t f th M d l



An Assessment of the Model

• Focuses only on information processing.

• No explanation was given about the

criteria by which the consumer accepts or

refuses to process some specific

information.



Concept Basic Idea Insight



Concept Basic Idea Insight

Information Processing

capacity

Consumers limitations in the

amount of information they

can acquire, use &

remember.

Choose the most important

and useful points to

communicate.

Information search Processing, acquiring &

evaluating information are

affected by motivation,

attention & perception

Provide that amount of info

which takes little effort to

obtain, draws consumers

attention & is unambiguous,

simple & clear.

Decision rules/Heuristics Rules of thumb, developed

to enable consumers to

select among preferred

alternatives.

Learn to synthesize

information, that has

meaning and purpose to

your target market.

Consumption and learning Internal feedback based on

outcome of choices whichare used in future decisions.

Keep in mind that the

consumers have probablymade related choices in the

past, & are not „empty

vessels‟

Information environment Amount, location, format,

readability & processabilityof relevant info

Design info tailored to the

audience; place itconveniently for use.

THE SHETH NEWMAN



THE SHETH-NEWMAN-

GROSS MODEL



• Proposed in 1991.

• Tries to explain „Why‟ consumers make

choices as they do.

• Highlights a series of specific measurements

to understand the underlying consumer

decision.



• SNG model is based on the basic

premise that “Consumer choice is a

function of certain specific consumption

values.” – Functional value

– Social value

– Emotional value – Epistemic value

– Conditional value



Functional value

• "The perceived utility acquired from analternative for functional, utilitarian, or

physical performance. An alternative

acquires functional value through the

possession of salient functional, utilitarian,

or physical attributes. Functional value is

measured on a profile of choice attributes.“

– decision to purchase a particular automobile

may be based on fuel economy and

maintenance record



Social value

• "The perceived utility acquired from an

alternative association with one or more

specific social groups. An alternative

acquires social value through associationwith positively or negatively stereotyped

demographic, socioeconomic, and cultural-

ethnic groups. Social value is measured ona profile choice imagery."

– a particular make of automobile is being

chosen more for the social image



Emotional value


alternatives capacity to arouse feelings or

affective states. An alternative acquires

emotional value when associated withspecific feelings or when precipitating those

feelings. Emotional values are measured

on a profile of feelings associated with thealternative."

– interest, joy, surprise, sadness, anger, disgust,

contempt, fear, shame, and guilt



Epistemic value


alternatives capacity to arouse curiosity,

provide novelty, and/or satisfy a desire

for knowledge. An alternative acquiresepistemic value by items referring to

curiosity, novelty, and knowledge."

– Trying something “NEW”



Conditional value• "The perceived utility acquired by an

alternative is the result of the specific

situation or set of circumstances facing the

choice maker. An alternative acquires

conditional value in the presence of antecedent physical or social contingencies

that enhance its functional or social value.

Conditional value is measured on a profileof choice contingencies."



• some products only have seasonal value

(e.g., greeting cards)

• some are associated with once in a life

events (e.g., wedding dress)

• and some are used only in emergencies

(e.g., hospital services)

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