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Basic Models of CB:

Consumer behavior models help a marketer in identifying and understanding a wide

range of variables that could explain consumer behavior. In this way these models
help a marketer understand and predict buyer behavior, and they help the marketer
formulate better marketing programs and strategies.

Economic Model: Economic model of consumer behaviour is a consumer decision making model based
Under the model, CB is one dimensional. Buying decisions
are based on the concept of utility. Assuming that a human being is always rational,
he will make his purchase decision with the intention of maximizing his utility. It is
based on certain predictions of buying behavior:
Price-effect- lesser the price of the product, more the qty.
purchased( this model doesnt take into consideration diminishing
marginal utility)
Lesser the price of substitute product, lesser will the qty. of the
original product bought. This is called substitution effect.
More the purchasing power, more will the qty. purchased i.e.
income effect.
It doesnt take into consideration effective component of human mind and it doesnt
take into consideration the products having no substitute like life saving medicines.
on the view of the economic man.

Learning Model: Classical psychologists have been interested in formation and

satisfaction of needs and tastes. According to them, living beings were influenced
by both innate needs like hunger, thrust, gender, shelter and learned needs like fear
and guilt. A drive or internal stimulus which when directed towards a drive reducing
objects becomes a motive. Products and services act as a stimulus to satisfy these
drives. It only takes care of effective component but not the rational component of
consumer mind.

Psycho-Analytical Model: Based on the research by psychologists in the

area of personality. This model is based on the theory by Sigmund Fraud. Herein,
human needs operate at the conscious as well as sub-conscious minds. Human
beings are considered to have 3 states which work in tandem. They are:
ID- A source of all psychic energy, which drives us to action. It is
most basic innate nature.
Super Ego- It is an internal representation of what is approved by
Ego- The conscious directing ID impulses to find gratification in a
society accepted manner.
On the basis of this, human behavior is said to be directed by a complex set of deep
seated motives. Therefore, buyers will be influenced by symbolic factors while
buying a product. Marketers use this approach to generate ideas for development of
product design features, advertisements and other promotional techniques. It

doesnt take into consideration internal traits of an individual according to the trait

Sociological Model: As per the model, an individual is a part of institution

called as society. Since he is living in society he gets influenced by it through his life
experiences and aculturisation. This individual in turn also influences the society.
The two work in tandem towards growth and development. The individual lays
several formal and informal associations like that of a family member, a student or
an employee or active member of an informal active social organization. This in turn
influences product choices and service selection.

Blackbox Model: As per this model, human mind is complex model of

observable, identifiable and measurable variables which are influenced by
psychological traits that are individual by each individual. It is difficult for a
marketer to be able to identify these variables. However the blackbox of a
consumer is identified by memories, goals and expectations of individual consumer.
Psychologists believe when a stimulus is directed towards a consumer, the memory
is triggered in blackbox which gives a desired. This theory is based on the concept
of classical conditioning wherein stimulus response is the elements which indicate
directed behavior of individual. It doesnt take into consideration motivation,
perception of the consumers.

Functions of NABARD
The full form of NABARD is National Bank for Agriculture and Rural Development. The
major functions of NABARD are as follows:

It acts as an apex body for meeting the credit needs of all types of agricultural and rural


It provides refinancing facilities to State Co-operative Banks (SCBs), Land Development

Bank (LDBs), Regional Rural Banks (RRBs) and other approved financial institutions for
financing rural economic activities.


It co-ordinates all agricultural and rural development activities with the objective of tying
them up with planned development activities in the rural sector.


It provides short-term, medium-term and long-term credit to SCBs, LDBs, RRBs and
approved financial institutions.


It provides long-term assistance (not exceeding 20 years) to State Governments.


It has the responsibility of inspecting co-operative banks and RRBs.


It maintains a research and development fund to promote research in agriculture and

rural development.


A feasibility study is an analysis of the ability to complete a project successfully, taking into
account legal, economic, technological, scheduling and other factors. Rather than just diving into
a project and hoping for the best, a feasibility study allows project managers to investigate the
possible negative and positive outcomes of a project before investing too much time and money.
A Feasibility study of project includes
Market analysis.
Technical analysis.
Financial analysis.

Ecological analysis
Market Analysis: The first step is to estimate the potential size of the market for the
product proposed in the project and get an idea of market share that is likely to be
captured. Market and demand analysis are concerned with two broad issues: What
is the likely aggregate demand for the product/service? What share of the market
can be captured

Step (1) Situational analysis and specification of objectives: Process stands

with informal discussion with customers, competitors, middlemen and others in the
industry. Analysis of situation generates sufficient idea to measure the market and
gives reliable information.
The objectives should be defined clearly and
comprehensively. Questions not relevant to the market and demand analysis
should not be asked.
Step (2): Collection of secondary information: Secondary information is the
information that has been gathered in some other context and is already available
provides a base point for market and demand analysis. Sources of secondary
information are: National sample survey reports Peoples of planning commission
Economic survey of industries Industry potential surveys Annual survey of
Evaluation of secondary information:
While this information is available
readily , its reliability, accuracy and relevance for the purpose under consideration
must be carefully examined. Who gathered the information? What was the
objective? When the information was collected? How representative was period
for which the information was gathered? Are the terms was selected? What was
the sample size? How representative was the sample? How satisfactory was the
process of information gathering? What was the degree of misrepresentation by
respondents? How accurate the information analyzed?
Step (3): Conduct of market survey: The secondary information must be
supplemented with primary information gathered through market survey specified
to the project surveyed. Primary information represents information that is collected
for the first time to meet the specified purpose on hand. The objectives of the
market survey should be to sought the information of any one or all of the
following : Demand and rate of growth of demand Demand in different segments
of market
Income and price elasticity of demands
Motives for buying
Satisfaction with existing products Attitudes towards various products Socioeconomic characteristics of buyers.

Steps in a sample survey are: Define the target population. Select the sampling
scheme and sample size. Develop the questionnaire. Recruit and train field
workers. Collection information from the sample of respondents. Scrutinizing the
information. Analysis the information Interpreting the results.
Heterogeneity of the country. Multiplicity of language. Design of questionnaire.
Step (4): Characterization of the market: Based on the secondary sources and
market survey the market for the product may be described in terms of :
Breakdown of demand Price Methods of distribution and sales promotion
Consumers Supply and competition Government policy
Step (5) : Demand Forecasting:
After gathering information about various aspects of the market from primary and
secondary sources an attempt may be made to estimate future demand. Demand
Forecasting means estimating or predicting the future demand or future sales for
the product of a firm using quantitative and qualitative methods
Step 6: Marketing plan: A marketing plan usually has the following components:
Current market situation Opportunity and Issue analysis Objectives Market
Strategy Action Programme.
Location and site:
Location refers to Broad area like city, industrial zone and Site refers to Specific
area or piece of land where the project would be set up. The choice of location
would depend on: Proximity to raw materials. Proximity to market Availability
of infrastructure
power, transportation, water, communication
availability Governmental policies Other factors (Climate, Living conditions,
Pollution, Ancillary units) The site selection would depend on the cost of site. Two
or three alternative sites must be considered and evaluated with respect to cost of
land and cost of site preparation and development