4 smnr models of consumer decision making (2)

8/6/2019 4 Smnr Models of Consumer Decision Making (2)

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GROUP MEMBERS

SAJA

DEEPIKA

SHAN

ANAS

SHANVER

TEJAS

SUHANI



Definition

´Consumer Behavior is the process

whereby individuals decide what,when, where, how and from whom

to purchase goods and servicesµ

Walters and Paul.



CONSUMERThe term µConsumer¶ refers to someone who

purchases a good or service for direct

ownership or consumption.

DECISION MAKING

Decision making can be regarded as the

mental processes resulting in the selection

of a course of action among several

alternatives.

Every decision making process produces a

final choice. Choice=Want + Ability to buy +

Attitude towards the brand.



GENERAL MODELSThe general model of consumer decision-making

has the following steps or the act of making aconsumer decision consists of the following

stages:

` NEED RECOGNITION.

` IDENTIFICATION OF ALTERNATIVES (InformationSearch)

` EVALUATION OF ALTERNATIVES.

` PURCHASE DECISION.

` POST PURCHASE BEHAVIOUR.� Satisfaction & Brand Loyalty.

� Cognitive Dissonance.



` THE NICOSIA MODEL

` THE HOWARD- SHETH MODEL

` SOCIOLOGICAL MODEL

` STIMULI MODEL

` ANDREASON MODEL



` In an early study of the buyer decisionprocess literature, Frank Nicosia (Nicosia, F.

1966; pp 9-21) identified three types of buyer

decision making models.

` They are the univariate model (He called it

the "simple scheme".) in which only one

behavioural determinant was allowed in

a stimulus-response type of relationship;



` the multi-variate model (He called it a"reduced form scheme".) in which

numerous independent variables were

assumed to determine buyer behaviour;

` and finally the "system of equations" model

(He called it a "structural scheme" or

"process scheme".) in which numerous

functional relations (either univariate or

multi-variate) interact in a complex system of

equations.



` He concluded that only this third type of

model is capable of expressing the

complexity of buyer decision processes.



` The Howard-Sheth model of buying behavior

attempts to explain the complexity of the consumer

decision making process in case of incomplete

information.

` This model suggests three levels of decision making

A) Extensive problem solving.

B) limited problem solving.

C) Habitual response behavior .



` At this level the consumer does not have any basic

information or knowledge about the brand and he

does not have any preferences for any product.

` In this situation, the consumer will seek information

about all the different brands in the market before

purchasing.



` This situation exists for consumers who have little

knowledge about the market, or partial knowledge

about what they want to purchase.

` In order to arrive at a brand preference some

comparative brand information is sought.



` In this level the consumer knows very well about the

different brands and he can differentiate between the

different characteristics of each product.

` According to the Howard-Sheth model there are four

major sets of variables:

Inputs.

Perceptual and Learning Constructs

Outputs

Exogenous(External) variables



� INPUTS:- These input variables consist of threedistinct types of information sources in the

consumer¶s environment.

� Significative:- Information furnishes physical brandcharacteristics such as

Quality,price,distinctive,service,availability.

� Symbolic:-verbal or visual product characteristicssuch as Quality,price,distinctive,service,availability.

� consumer¶s social environment:- family, referencegroup, and social class.



` Perceptual and Learning Constructs:-

It deals with the psychologicalvariables involved when the consumer is making a

decision.

` How the consumer receives and understands the

information from the input s.` consumers goals, information about brands, criteria

for evaluation alternatives, preferences and buying

intentions are all included.



� Outputs:-

The outputs are the results of the perceptual

and learning variables and how the consumers will

response to these variables .

� Exogenous(External) variables:-

some relevant exogenous variablesinclude

� The importance of the purchase,

� Consumer personality traits,� Religion, and

� Time pressure.



SOCIOLOGICAL MODEL

- According this model the individual buyer is

a partof the institution called society. Since

he is living in a society, he gets influenced by

it and in turn also

influences it in its path of development.

- The buyer plays many roles as a part of

various formal and informal

associations or organisations.

- Such interactions leave some impressions on

him and may play a role ininfluencing his buying behavior.



` Intimate groups comprising of family,

friends, and close colleagues

exercise a strong influence on the life

style and buying behavior of anindividual member. The peer group

plays a very important role in acting as

an influencing factor especially

adopting particular life style and buying

behavior pattern.



` - Similarly, depending on the income,occupation, place of residence etc. each

individual member is recognized as belongingto a certain social class. As a member of a

particular

class, he may enjoy certain status

and prestige.

- Further, each class has its own standards

of life style and buying behavior pattern.

- So an individual member will adopt the role

suitable to confirm to the

style and behavioral pattern of the socialclass to which he/she belongs.



` - The marketer through the process of

market segmentation can work out on

the common behavior pattern of a

specific class and group of buyers andtry to influence their buying pattern.



` The black box model shows the interaction

of stimuli, consumer characteristics,

decision process and consumer responses.

It can be distinguished between

interpersonal stimuli (between people) or

intrapersonal stimuli (within people).



ENVIRONMENT AL FACT ORS BUYER'S BLACK BOXBUYER'S

RESPONSEMarketingStimuli

EnvironmentalStimuli

Buyer Characteristics

Decision Process

Product

Price

Place

Promotion

EconomicTechnological

Political

Cultural

Demogra hic

Natural

AttitudesMotivation

Perceptions

Personality

Li estyle

Kno ledge

Problem

recognition

In ormationsearch

Alternativ e

evaluation

Purchase

decisionPost-purchase

behaviour

Product choiceBrand choice

Dealer choice

Purchase timing

Purchase

amount



A complete understanding of the influencesthat affect consumer behavior is an

essential foundation for building a marketing

strategy. Hawkins, Best, and Coney (2001)

suggested a process for identifyinginformation associated with the critical

decisions that marketing managers must

make about major elements of marketing,

known as consumer behavior audit .



CONSUMER BEHAVIOR AUDIT CONSISTS OF:

MARKET SEGMENTATION

PRODUCT POSITION

PRICING

DISTRIBUTION STRATEGY

PROMOTION STRATEGY

PRODUCT

CUSTOMER SATISFACTION AND COMMITMENT



It is the process of dividing all possible users

of a product into groups that have similar

needs the products might satisfy. The reason

for continuing segmentation analyses is thedynamic nature of consumer needs.



It is the way the consumer thinks of a given

product or brand relative to competing brand

or product. The capabilities and motivations of

existing and potential competitors must alsobe considered.



The manager must set a pricing policy that

is consistent with the desired product

position. Price must be broadly conceived as

everything a consumer must surrender toobtain a product which includes time and

psychological costs as well as monetary

costs.



The distribution strategy must be consistent

with the selected product position. This involves

the selection of outlets if the item is a physical

product, or the location of the outlets if the productis a service.



The manager must develop a promotional

strategy, including advertising, nonfunctional

package design features, publicity,

promotions, and sales force activities that areconsistent with the product position.



The marketing manager must be certain that

the physical product, service or idea has the

characteristics required to achieve the desired

product position in each market segment.



Marketers must produce satisfied customers

to be successful in the long run. It is often to a

firm¶s advantage to go beyond satisfaction and

create committed or loyal customers.



THANK

YOUu!!!

4 smnr models of consumer decision making (2)

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