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CONSUMER BEHAVIOR

UNIT-I: Introduction: Nature, Scope and meaning of consumer behavior-consumer and marketing
strategy-Determinants of consumer behavior-Models of consumer behavior (Nicosia, Howard Seth
Model, The Engel Kollat-Blackwell Model) Profile of the Indian Consumer.
Introduction: Consumer behavior is comparatively a new field of study which evolved just after the
Second World War. The sellers market has disappeared and buyers market has come up. This led to
paradigm shift of the manufacturers attention from product to consumer and specially focused on the
consumer behaviour. The evaluation of marketing concept from mere selling concept to consumer
oriented marketing has resulted in buyer behavior becoming an independent discipline. The growth of
consumerism and consumer legislation emphasizes the importance that is given to the consumer.
Consumer behavior is a study of how individuals make decision to spend their available resources (time,
money and effort) or consumption related aspects (What they buy? When they buy?, How they buy?
etc.).
The heterogeneity among people makes understating consumer behavior challenging task to marketers.
Hence marketers felt the need to obtain an in depth knowledge of consumers buying behavior. Finally
this knowledge acted as an imperative tool in the hats of marketers to forecast the future buying
behavior of customers and devise four marketing strategies in order to create long term customer
relationship.
Consumer Behaviour
It is broadly the study of individuals, or organizations and the processes consumers use to search, select,
use and dispose of products, services, experience, or ideas to satisfy needs and its impact on the
consumer and society.
Customers versus Consumers
The term customer is specific in terms of brand, company, or shop. It refers to person who customarily
or regularly purchases particular brand, purchases particular companys product, or purchases from
particular shop. Thus a person who shops at Bata Stores or who uses Raymonds clothing is a customer
of these firms. Whereas the consumer is a person who generally engages in the activities - search,
select, use and dispose of products, services, experience, or ideas.
Consumer Motives
Consumer has a motive for purchasing a particular product. Motive is a strong feeling, urge, instinct,
desire or emotion that makes the buyer to make a decision to buy. Buying motives thus are defined as

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those influences or considerations which provide the impulse to buy, induce action or determine choice
in the purchase of goods or service. These motives are generally controlled by economic, social,
psychological influences etc.
Need for Study of Consumer Behaviour
The study of consumer behavior helps everybody as all are consumers. It is essential for marketers to
understand consumers to survive and succeed in the competitive marketing environment. The following
reasons highlight the importance of studying consumer behaviour as a discipline.
Before understanding consumer behaviour let us first go through few more terminologies:
Who is a Consumer? Any individual who purchases goods and services from the market form his/her
end-use is called a consumer. In other words a consumer is one who consumes goods and services
available in the market. Example - Tom might purchase a tricycle for his son or Mike might buy a shirt
for himself. In the above examples, both Tom and Mike are consumers.
What is consumer Interest ? Every customer shows inclination towards particular products and
services. Consumer interest is nothing but willingness of consumers to purchase products and services
as per their taste, need and of course pocket.
What is Consumer Behaviour?
Consumer Behaviour is a branch which deals with the various stages a consumer goes through
before purchasing products or services for his end use.
Why do you think an individual buys a product ?
Need
Social Status
Gifting Purpose
Why do you think an individual does not buy a product ?
No requirement
Income/Budget/Financial constraints
Taste
When do you think consumers purchase products?
Festive season
Birthday
Anniversary
Marriage or other special occasions
There are in fact several factors which influence buying decision of a consumer ranging from
psychological, social, economic and so on.
The study of consumer behaviour explains as to:
Why and why not a consumer buys a product?
When a consumer buys a product?
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How a consumer buys a product?


During Christmas, the buying tendencies of consumers increase as compared to other months. In the
same way during Valentines week, individuals are often seen purchasing gifts for their partners.
Fluctuations in the financial markets and recession decrease the buying capacity of individuals.
In a laymans language consumer behaviour deals with the buying behaviour of individuals. The
main catalyst which triggers the buying decision of an individual is need for a particular
product/service. Consumers purchase products and services as and when need arises

DEFINING CONSUMER BEHAVIOR:


Consumer Behavior may be defined as the interplay of forces that takes place during a consumption
process, within a consumers self and his environment. - this interaction takes place between three
elements viz. knowledge, affect and behavior; - it continues through pre-purchase activity to the post
purchase experience; - it includes the stages of evaluating, acquiring, using and disposing of goods and
services.
The consumer includes both personal consumers and business/industrial/organizational consumers.
Consumer behavior explains the reasons and logic that underlie purchasing decisions and consumption
patterns; it explains the processes through which buyers make decisions. The study includes within its
purview, the interplay between cognition, affect and behavior that goes on within a consumer during the
consumption process: selecting, using and disposing off goods and services.
Consumer behavior explains the reasons and logic that underlie purchasing decisions and consumption
patterns; it explains the processes through which buyers make decisions. The study includes within its
purview, the interplay between cognition, affect and behavior that goes on within a consumer during the
consumption process: selecting, using and disposing off goods and services.
The behavior that consumers display in searching for, purchasing, using, evalauting and disposing of
products and services that they expect will satisfy their needs.
- Schiffman and Kanuk
..the decision process and physical activity engaged in when evaluating, acquiring, using or
disposing of goods and services."
- Loudon and Bitta

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The study of consumers as they exchange something of value for a product or service that satisfies
their needs
- Wells and Prensky
Those actions directly involved in obtaining, consuming and disposing of products and services
including the decision processes that precede and follow these actions.
-Engel, Blackwell, Miniard
the dynamic interaction of effect and cognition, behavior and the environment by which human
beings conduct the exchange aspects of their lives
-American Marketing Association

NATURE and SCOPE OF CONSUMER BEHAVIOR


Nature of Consumer Behavior:
1

The subject deals with issues related to cognition, affect and behavior in consumption behaviors,
against the backdrop of individual and environmental determinants. The individual determinants pertain
to an individuals internal self and include psychological components like personal motivation and
involvement, perception, learning and memory, attitudes, self-concept and personality, and, decision
making. The environmental determinants pertain to external influences surrounding an individual and
include sociological, anthropological and economic components like the family, social groups,
reference groups, social class, culture, sub-culture, cross-culture, and national and regional influences.

The subject can be studied at micro or macro levels depending upon whether it is analyzed at
the individual level or at the group level.

The subject is interdisciplinary. It has borrowed heavily from psychology (the study of the
individual: individual determinants in buying behavior), sociology (the study of groups: group
dynamics in buying behavior), social psychology (the study of how an individual operates in
group/groups and its effects on buying behavior), anthropology (the influence of society on the
individual: cultural and cross-cultural issues in buying behavior), and economics (income and
purchasing power).

Consumer behavior is dynamic and interacting in nature. The three components of cognition,
affect and behavior of individuals alone or in groups keeps on changing; so does the environment.
There is a continuous interplay or interaction between the three components themselves and with the

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environment. This impacts consumption pattern and behavior and it keeps on evolving and it is highly
dynamic.
1

Consumer behavior involves the process of exchange between the buyer and the seller, mutually
beneficial for both.

As a field of study it is descriptive and also analytical/ interpretive. It is descriptive as it


explains consumer decision making and behavior in the context of individual determinants and
environmental influences. It is analytical/ interpretive, as against a backdrop of theories borrowed
from psychology, sociology, social psychology, anthropology and economics, the study analyzes
consumption behavior of individuals alone and in groups.

2
3

It makes use of qualitative and quantitative tools and techniques for research and analysis, with
the objective is to understand and predict consumption behavior.

It is a science as well as an art. It uses both, theories borrowed from social sciences to understand
consumption behavior, and quantitative and qualitative tools and techniques to predict consumer
behavior.

SCOPE OF CONSUMER BEHAVIOR:


The study of consumer behavior deals with understanding consumption patterns and behavior. It
includes within its ambit the answers to the following: - What the consumers buy: goods and services
- Why they buy it: need and want
- When do they buy it: time: day, week, month, year, occasions etc.
- Where they buy it: place
- How often they buy it: time interval
- How often they use it: frequency of use
The scope of consumer behavior includes not only the actual buyer but also the various roles played by
him/ different individuals.
The lady of a house who is a housewife and spends her day at home doing household chores
watches TV in her free time. That is her only source of entertainment. The TV at home is giving
problem. She desires a new TV set, and says that she wants an LCD plasma TV. Now the roles
played are:
1. Initiator: the housewife (mother)
2. Influencer: a friend / neighbor
3. Decider: the husband or the son
4. Buyer: the husband or the son
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5. User: the family


Consumer behavior focuses specifically on the Buyer and often User. But also analyzes impact of other
roles.

CONSUMER BEHAVIOUR AND MARKETING STRATEGIES


Understanding the consumer behaviour is the basic for marketing strategy formulation. Consumers
reaction to this strategy determines the organization success or failure. In this competitive environment
Organizations can survive only by offering more customer value - difference between all the benefits
derived from a total product and all the costs of acquiring those benefits than competitors. Providing
superior customer value requires the organization to do a better job of anticipating and reacting to the
customer needs than the competitor.
Marketing strategy is basically the answer to the question: How will company provide superior
customer value to its target market? The answer to this question requires formulation of marketing mix product, price, place and promotion- strategies. The right combination of these elements meets
customer expectation and provides customer value. For example, marketer of a bike must know the
customers performance expectations, desired service, Price willing to pay, information he seeks and
after-sales service to provide superior customer value.
CONSUMER BEHAVIOUR AND MARKETING IMPLICATIONS
The basic belief of marketing-oriented company is that the customer is the hub around which the
business revolves. Therefore, understanding what makes people in general buy and what makes your
customer in particular buy is a vital part of business success. Market itself means customer, around
whom all marketing strategies are formulated and implemented. In order to meet competition at the
market place, the marketing managers are using various methods to add value to the final product
which will reach the hands of the consumers. It means in ever changing marketing environment, there
is a growing concern or awareness among marketers to go for a careful study of the consumer

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behaviour around which all marketing activities are made. Following are the key marketing
implications of consumer behaviour.

CONSUMER BEHAVIOUR AND MARKET SEGMENTATION


The most important marketing decision a firm makes is the selection of one or more segments to focus
their marketing effort. Marketers do not create segments but they find it in the market place. Market
segmentation is the study of marketplace in order to discover viable group of consumers who are
homogeneous in their approach in selecting and using goods or services. Since market segment
has unique needs, a firm that develops a product focusing solely on the needs of that segment will be
able to meet the target group desire and provides more customer value than competitor. For example,
right segment for Femina magazine is educated urban women. The success of this magazine depends
ontheir understanding of the urban woman.
CONSUMER BEHAVIOUR AND PRODUCT POSITIONING
Product positioning is placing the product, service, company, or shop in the mind of consumer or target
group. Through positioning marketers seek the right fit between a product and desired customer
benefits. The right positioning means understanding the consumer perception process in general and
perception of companys product in particular. For example, Samsung brand is perceived as
premium brand by few customers and value-driven brand by others in the market, but marketer must
find out what makes their target market to perceive differently and position it accordingly.
CONSUMER BEHAVIOUR AND MARKETING RESEARCH
Studying consumer behaviour enables marketing researchers to predict how consumers will react to
promotional messages and to understand why they make the purchase decision they do. Marketers
realized that if they know more about the consumer decision making criteria, they can design marketing
strategies and promotional messages that will influence consumers more effectively. The importance of
consumer behaviour made marketers to think of a separate branch in marketing research - Consumer
research, to deal exclusively for consumer related issues. The current focus of consumer research is on
study of underlying needs and motives in taking purchase decisions, consumer learning process and
attitude formation process.
CONSUMER BEHAVIOUR AND NON-PROFIT AND SOCIETAL MARKETING
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A sound knowledge of consumer behaviour can help the organizations that sell ideas and concepts of
social relevance. Institutions that promote family planning, AIDS free society, governmental agencies,
religion orders and universities also appeal to the public for their support in order to satisfy some
want or need in society. The knowledge about potential contributors, what motivate their generosity,
how these motives can be effectively appealed is useful for the organizations involved in these
activities.
CONSUMER BEHAVIOUR AND GOVERNMENTAL DECISION MAKING
To major areas where consumer behaviour study helps government is in policymaking on various
services, and in designing consumer protection legislation
The knowledge of peoples attitudes, beliefs, perceptions and habits provides
adequate understanding of consumers.

MODELS OF CONSUMERS

CONSUMER DECISION MODEL (the EngelBlackwell-Miniard Model)

Introduction:

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Consumers are different. Although the decision making process is the same, they have varying
perspectives and this impacts the final decision. 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. Researchers have attempted to study the dynamics
of consumer decision making consumer behavior from varying orientations, and various models have
been proposed. These models have evolved from the economic paradigm of the 1940s, to the irrational,
impulsive, emotional and vulnerable social consumer of the 1950s and 1960s, to the information
processor of the 1960s and 70s, to the cognitive and rational consumer post 1980s. The purchase
paradigms have also evolved; there is the cognitive paradigm, where purchase is regarded as an outcome
of problem solving; the reinforcement paradigm, where purchase is regarded as a learned behaviour; and
the habit paradigm, where it is regarded as a pre-established routine pattern of behaviour

MODELS OF CONSUMER BEHAVIOR: SPECIFIC MODELS


The consumer models refer to varying orientations and perspectives with which consumers approach the
marketplace and how/why they behave as they do. They refer to how the varying orientations impact the
buying decision process and overall buyer behavior.. This deals with two Specific Models.
SPECIFIC MODELS: The models that have been explained in this session are Howard and Sheths
model and Nicosias model.
i) The Howard Sheth model (1969):
Howard and Sheth used the term buying behavior and not consumer behavior as the industrial buyers
and consumers are similar in most aspects. While the model was proposed in the 1960s, for industrial
buying, the term buyer is used to connote both industrial consumers and personal consumers. Through
the model, Howard and Sheth, tried to explain buyer rationality while making purchase decisions even
in conditions of incomplete information. While they differentiated between three levels of decision
making, EPS, LPS and RPS, the model focuses on repeat buying/purchase.
LEVELS OF CONSUMER DECISION MAKING

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The consumer decision making process is complex with varying degree. All purchase decisions do not
require extensive effort. On continuum of effort ranging from very high to very low, it can be
distinguished into three specific levels of consumer decision making:
1 Extensive Problem Solving ( EPS )
2. Limited Problem Ssolving ( LPS )
3. Routine Problem Solving ( RPS )
1.Extensive Problem Solving ( EPS ) : When consumers buy a new or unfamiliar product it usually
involves the need to obtain substantial information and a long time to choose. They must form the
concept of a new product category and determine the criteria to be used in choosing the product or brand.
2.Limited Problem Solving ( LPS ) : Sometimes consumers are familiar with both product category
and various brands in that category, but they have not fully established brand preferences. They search
for additional information helped them to discriminate among various brands.
3.Routine Problem Solving ( RPS ) : When consumers have already purchased a product or brand ,
they require little or no information to choose the product. Consumers involve in habitual and
automatic purchases.
The model has four major components, viz., stimulus inputs (input variables), hypothetical
constructs, response outputs (output variables), and, exogenous variables.
a) Stimulus inputs (Input variables): The input variables refer to the stimuli in the environment; they
take the form of informative cues about the product/service offering; these information cues could relate
to quality, price, distinctiveness, service and availability.
The informational cues could be Significative, Symbolic, (both of which are commercial and can be
controlled by the marketer) and Social (non-commercial and uncontrollable by the marketer; family,
reference groups and social class). All these three types of stimuli provide inputs concerning the
product/brand to a consumer.
- Significative stimuli: The product/brand information that the marketer provides, comprises the
significative component; it deals essentially with the brand characteristics.
- Symbolic stimuli: this is the psychological form with which a buyer perceives the product and service
offering (brand); it is figurative (verbal and visual product characteristics) and perceptual and depends
on how the offering has been positioned; it emanates from advertising and promotion efforts.

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-Social stimuli: this is the information about the product or service offering that comes from the social
environment viz. family, groups, society and culture at large.

b) Hypothetical constructs: Howard and Sheth classified the hypothetical constructs into two major
groups, viz., perceptual constructs and learning constructs. These constitute the central part of the
model and deal with the psychological variables which operate when the consumer is undergoing the
decision making process.
- Perceptual constructs: The perceptual constructs deal with how a consumer obtains and processes
information received from the input variables. Once the buyer is exposed to any information, there is an
attention; this attention towards the stimuli depends on the buyers sensitivity to information in terms of
his urge and receptivity towards such information. Not all information would be processed and the
intake of information is subject to perceived uncertainty and lack of meaningfulness of information; this
is referred to as stimulus ambiguity. This reflects the degree to which the buyer regulates the stimulus
information flow. Stimulus ambiguity occurs when a consumer does not understand the message from
the environment; it could trigger off a need for a specific and active search for information and thus lead
to an overt search for information. The information that is gathered and processed may suffer from
perceptual bias if the consumer distorts the information received so as to fit his/her established
needs/beliefs/values/experiences etc.
- Learning constructs: The learning constructs relate to buyer learning, formation of attitudes and
opinions, and the final decision. The learning constructs are seven in number, and range from a buyers
motive for a purchase to the final satisfaction from a purchase; the interplay of these constructs
ultimately leads to a response output or a purchase. The motives refer to the goals that a buyer seeks to
achieve through a purchase and the corresponding urge towards action or the purchase activity. The
brand comprehension is the knowledge and information that the buyer has about the various brands in
his evoked set. The buyer forms an order of preference for the various brands; this order of preference is
based on the choice criteria (decision mediators). The decision mediators are the evaluative criteria and
the application of decisions rules by the buyer to the various purchase alternatives.

Based on the choice criteria, the attitudes are formed for the varying brands. The attitudes reflect the
predisposition of the buyer; preference toward alternative brands; and, feelings of like/dislike towards

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the offerings. The brand potential of the evoked set determines the buyer's perception and confidence
level of the brands that he is considering to purchase. The purchase intention is a cumulative outcome of
the interaction of buyer motives, choice criteria, brand comprehension, resultant brand attitude and the
confidence associated with the purchase. Satisfaction, another learning construct, involves the post
purchase evaluation (whether expectation from an offering matches the performance) and resultant
impact (positive/negative) on brand comprehension.
c) Response outputs (output variables): The output variables refer to the buyers action or response
to stimulus inputs. According to Howard and Sheth, the response outputs comprise five constituents,
viz., attention, comprehension, attitude, intention and purchase. These could be arranged in a
hierarchy, starting from attention and ending up with purchase.
- Attention refers to the degree or level of information that a buyer accepts when exposed to a stimulus.
It reflects the magnitude of the buyer's information intake.
- Comprehension is the amount of information that he actually processes and stores; here, it refers to
brand comprehension which is buyers knowledge about the product/service category and brand.
- The attitude is the composite of cognition, affect and behavior towards the offering; the attitude
reflects his evaluation of the brand and the like/dislike based on the brand potential.
- Intention refers to the buyers intention to buy or not to buy a particular offering.
- Purchase behavior refers to the actual act of buying. The purchase behavior is a cumulative result of
the other four constituents.
d) Exogenous variables: The Howard and Sheth model also comprises certain constant exogenous
variables that influence some or all of the constructs explained above, and thereby impact the final
output variables. These are explained as Inhibitors or environmental forces that restrain the purchase
of a favored brand; eg., importance of the purchase, price, financial status of the buyer, time at the
disposal of the buyer, personality traits, social pressures etc.

Working relationships between Constructs and the Model:


Through their model, Howard and Sheth explain the buying decision process that a buyer undergoes, and
the factors that affect his choice decision towards a brand. The process starts when the buyer is exposed
to a stimulus. As a result of the exposure, stimulus ambiguity occurs, which leads to an overt search for
information. The information that is received is contingent upon the interplay between the attitudes and
the motives. In other words, the search for information and the conclusions drawn would be filtered by
perceptual bias (that would be a result of attitude, confidence, search and motives). It may alter the
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existing patterns of motives and choice criteria, thereby leading to a change in the attitude towards the
brand, brand comprehension, motives, purchase intention and/or action. The final purchase decision is
based on the interaction between brand comprehension, strength of attitudes towards the brand,
confidence in the purchase decision and purchase intention. The actual purchase is influenced by the
buyer's intentions and inhibitors, which he confronts. The entire process is impacted by various
exogenous variables like the importance of purchase, price, time available to make the purchase, social
and cultural influences etc. After the purchase, the buyer experiences satisfaction if the performance
matches and exceeds expectation; this satisfaction would strengthen brand comprehension, reinforce the
confidence associated with the buying situations, and strengthen the intention to repeat purchase of the
brand. With a satisfying purchase decision, the buyer learns about buying in similar situations and the
behavior tends to get routinized. The purchase feedback thus influences the consumers attitudes and
intention.
An Assessment of the Model
The model is an integrative model that incorporates many of the aspects of consumer behavior; it links
together the various constructs/variables which may influence the decision making process and explains
their relationship that leads to a purchase decision. It highlights the importance of inputs to the consumer
buying process. It was one of the first models to divulge as to what constitutes loyalty towards a specific
product. It helped gain insights in to the processes as to how consumers process information. The model
is user friendly and is one of the few models which has been used most commonly and tested in depth.
However, the limitation lies in the fact that the various constructs cannot be realistically tested; some of
the constructs are inadequately defined, and thus do not lend to reliable measurements.

Other way of Model Explanation:


The Theory of Buyer Behaviour
Howard developed the first consumer decision-model in 1963 . This model was developed further in
1969 by Howard and Sheth to become the Theory of Buyer Behaviour (or Howard and Sheth Model) .
It provides a sophisticated integration of the various social, psychological and marketing influences on
consumer choice into a coherent sequence of information processing. The fundamental architecture of
the model is outlined in Figure

below, with the exogenous variables not appearing in the first

publication of the work, but in subsequent publications. The authors interest was in constructing a

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comprehensive model that could be used to analyse a wide range of purchasing scenarios, and as such
the term buyer was preferred over consumer so as to not exclude commercial purchases .

Input variables are the environmental stimuli that the consumer is subjected to, and is communicated from a
variety of sources. Significative stimuli are actual elements of products and brands that the buyer confronts,
while symbolic stimuli refers to the representations of products and brands as constructed by marketers
through advertising and act on the consumer indirectly .Social stimuli include the influence of family and
other peer and reference groups. The influence of such stimuli is internalised by the consumer before they
affect the decision process.

The Hypothetical Constructs (or Intervening Variables) can be classified in two categories: those described
as Perceptual constructs, and those described as Learning constructs. Perceptual constructs include:
Sensitivity to information the degree to which the buyer controls the flow of stimulus information.
Perceptual bias distortion or alteration of the information received due to the consumers fitting the new
information into his or her existing mental set.
Search for information the active seeking of information on consumption choices.
In combination these perceptual constructs serve to control, filter and process the stimuli that are received.
The model draws heavily on learning theory concepts , and as such six learning constructs are represented:
Motive described as either general or specific goals impelling action.
Evoked Set the consumers assessment of the ability of the consumption choices that are under active
consideration to satisfy his or her goals.
Decision mediators the buyers mental rules or heuristics for assessing purchase alternatives.
Predispositions a preference toward brands in the evoked set expressed as an attitude toward them.

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Inhibitors environmental forces such as limited resources (e.g. time or financial) which restrain the
consumption choice.

Satisfaction represents a feedback mechanism from post-purchase reflection used to inform subsequent
decisions.
This process of learning serves to influence the extent to which the consumer considers future purchases, and
seeks new information. Howard and Sheth suggested that consumer decision making differs according to the
strength of the attitude toward the available brands; this being largely governed by the consumers
knowledge and familiarity with the product class. In situations where the consumer does not have strong
attitudes they are said to engage in Extended Problem Solving (EPS), and actively seek information in order
to reduce brand ambiguity. In such situations the consumer will also undertake prolonged deliberation before
deciding which product to purchase or indeed, whether to make any purchase. As the product group becomes
more familiar, the processes will be undertaken less conscientiously as the consumer undertakes Limited
Problem Solving (LPS) and eventually Routine Problem Solving (RPS) .
Exogenous variables (as depicted at the top of the model; figure ) outlines a number of external variables that
can significantly influence decisions. As these factors are likely to depend, to some degree, on the individual
buyer they are not as well defined by Howard and Sheth . Howard and Sheth (1969) noted that these
exogenous variables contained the history of the buyer up to the beginning of the period of observation.
The five output variables on the right of the model represent the buyers response, and follow the progressive
steps to purchase:
Attention the magnitude of the buyers information intake.
Comprehension the processed and understood information that is used.
Attitudes the buyers evaluation of a particular brands potential to satisfy the purchase motives.
Intention the buyers forecast of which product they will buy.
Purchase Behaviour the actual purchase behaviour, which reflects the buyers predisposition to buy as
modified by any inhibitors .

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ii) Nicosias model of Consumer Decision Process (1966):


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The model proposed by Francesco Nicosia in the 1970s, was one of the first models of consumer behavior
to explain the complex decision process that consumers engage in during purchase of new products.
Instead of following a traditional approach where the focus lay on the act of purchase, Nicosia tried to
explain the dynamics involved in decision making. Presenting his model as a flow-chart, he illustrated the
decision making steps that the consumers adopt before buying goods or services; decision aiming was
presented as a series of decisions, which follow one another. The various components of the model are
seen as interacting with each other, with none being essentially dependent or independent; they are all
connected through direct loops as well as feedback loops. Thus, the model describes a flow of influences
where each component acts as an input to the next. The consumer decision process focuses on the
relationship between the marketing organization and its consumers; the marketing organization through its
marketing program affects its customers; the customers through their response to the marketers action,
affects the subsequent decisions of the marketer; the cycle continues.
The various components that are further distinguished into main fields and subfields of the model are
marketer's communication affecting consumers attitude, consumer's search and evaluation, purchase
action, consumption experience and feedback. The first field ranges from the marketer (source of
message) to the consumer (attitude); the second from the search for to the evaluation of means/end(s)
relation(s) which forms the preaction field; the third field relates to the act of purchase; and the fourth to
feedback. The output from one field acts as the input for the next. These are explained as follows:

1.

Marketer's communication affecting consumers attitude: This comprises Field 1 (i.e. from
the source of a message to the consumers attitude). The consumer is exposed to the firms attributes
through the marketing communication; this marketing communication could take place impersonally via
mass media (TV, newspaper, websites, etc) as well as personally. The information could relate to the firm
attributes as well as the product, price and distribution. This message relating to the firms attributes
affects the consumers perception, predisposition and attitude toward the firm and its offering. Of course,
the impact on perception and attitude is also dependent upon the consumers personal characteristics,
values, experiences, culture, social influences etc. Thus, the marketers communication affects the

2.

consumers attitude.
2. Consumer's search and evaluation: After an attitude is formed, the consumer moves to Field
2 of the model, i.e. the consumers search for and evaluation of means/end(s) relation(s) which forms the
preaction field. The consumer searches for information about the product category and the varying

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alternatives, and thereafter evaluates the various brands on criteria like attributes, benefits, features etc.
These criteria could be based on his learning and past experiences as well as the marketer's inputs. This
step creates a motive in the mind of the consumer to purchase the product.
3. Purchase action: The motivated state leads to Field 3 of the model, i.e. the decision making on the part
of the consumer and the act of purchase. The consumer finally gets into action and buys the product from
a chosen retailer.
4. Consumption experience and feedback: The purchase action leads a consumer to Field 4 of the model
which is consumption experience and feedback. After purchasing the product, and the resultant
consumption, the consumer may have two kinds of experiences. A positive experience in terms of
customer satisfaction may reinforce his predisposition with the product/brand and make him loyal towards
it. A negative experience on the other hand, implying consumer dissatisfaction would affect his attitude
negatively, lower down evaluations about the product/brand and even block his future purchases. This
Filed provides feedback to the marketer, who can modify its mix accordingly.
In the first field, the marketer communicates with the customer and promotes an unfamiliar product to
him; depending upon the existing predispositions and his evaluation, the consumer develops an attitude. In
the second field, the consumer searches for information and evaluates it based on his attitudes; thereafter,
he develops a motivation to act. In the third field, he makes and purchase and in the fourth field, he would
provide feedback and also memorize his experience and learning for future use. Thus, the firm
communicates with consumers through its marketing messages and the consumers react through an act of
purchase. Both the firm and the consumer influence each other.

An Assessment of the Model Nicosias model is an integrative model that tries to integrate the body of
knowledge that existed at the time of its formulation in the area of consumer behavior. It was a pioneering
attempt to focus on the conscious decision-making behavior of consumers, where the act of purchase was
only one stage in the entire ongoing decision process of consumers. The flowcharting approach proposed
by Nicosia, simplifies and systemizes the variables that affect consumer decision making. It contributes to
the step by step "funnel approach" which views consumers movement from general product knowledge
toward specific brand knowledge and from a passive position to an active state which is motivated toward
a particular brand.
However, the model suffers from limitations in the sense that the model proposes assumptions, boundaries
and constraints that need not be realistic. It has been argued that attitude, motivation and experience may
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not occur in the same sequence. Variables in the model have not been clearly defined. Factors internal to
the consumer have not been defined and dealt with completely. The mathematical testing of the model and
its validity are questionable.

NICOSIA MODEL
The buyer behaviour model is taken from the marketing mans point of view. It is also called systems
model as the human is analysed as a system, with stimuli as the input to the system and the human
behaviour as an output of the system. Francesco Nicosia, an expert in consumer motivation and
behaviour has developed this in 1966. He tried to explain buyer behaviour by establishing a link between
the organization and its prospective consumer. Here the messages from the company initially influence
the predisposition of the consumer towards the product and service. Based on the situation, the consumer
will have a certain attitude towards the product. This may result in a search for the product or an

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evaluation of the product attributes by the consumer. If this step satisfies the consumer, it may result in a
positive response, with a decision to buy the product or else the reverse may occur. The Nicosia model
divides the above activity explanation into four basic areas:

Area 1: Field one has two sub areas-the consumer attributes and the firms attributes. The advertising
message from the company will reach the consumers attributes. Certain attributes may develop
sometimes depending upon the way the message is received by the consumer. The newly developed
attribute becomes the input for area 2.
Area 2: This area is related to the search and evaluation undertaken by the consumer of the advertised
product and also to verify if other alternatives are variable. If the above step motivates to buy the
product / service, it becomes the input for the third area.
Area 3: This area explains as how the consumer actually buys the product .
Area 4: This is related to the uses of the purchase items. This can also be used
as an out put to receive feedback on sales results to the firm.

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The heterogeneity among people across the world makes understanding consumer buying behaviour an
intricate and challenging task. Product motives and patronage motives play a crucial role in consumer
purchases. Like individuals organisations also make many buying decisions. The major factors that
distinguish it from consumer decision are Market structure and Demand, Buyer characteristics, and
Decision process and buying patterns. The degree of involvement has a lot of impact on search of
information, Information processing, and Transmission of information. The various models of consumer
involvement help marketers to study purchase behaviour across product segments.
Consumers usually go through five stages in arriving at a purchase decision. In the first stage, the
customer identifies an unsatisfied need. In the second stage consumer collect information about the
product and brands. In a third stage, the consumer evaluates all the alternatives with the help of available

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information. Later in stage four, the customer makes a purchase decision. And finally in the fifth stage,
consumer experiences post-purchase satisfaction or dissatisfaction. Organizational buyer has different
decision making criteria. Decision making rules Compensatory and Non compensatory simplify the
complex nature of decision making to consumers. Understanding consumer behaviour is the basis of the
formulation of marketing strategies. Consumer behaviour studies help in designing effective marketing
strategies like, Marketing-mix Strategy, Market Segmentation Strategy, Product Positioning Strategy, and
Marketing Research. As consumer behaviour is very complex to understand, consumer models aid
marketer to put their effort to understand in right direction. The models Economic. Learning,
Psychoanalytic, sociological, Howard-Sheth and Nicosia enables marketers to understand and predict
consumer behaviour in the market place.

CONSUMER DECISION MODEL


The Consumer Decision Model (also known as the Engel-Blackwell-Miniard Model) was originally
developed in 1968 by Engel, Kollat, and Blackwell and has gone through numerous revisions;
It can be seen that many of the elements of the model are similar to those presented in the Theory of
Buyer Behaviour, however the structure of presentation and relationship between the variables differs
somewhat. The model is structured around a seven point decision process: need recognition followed
by a search of information both internally and externally, the evaluation of alternatives, purchase,
Consumption, post purchase reflection and finally, divestment.
These decisions are influenced by two main factors. Firstly stimuli is received and processed by the
consumer in conjunction with memories of previous experiences, and secondly, external variables in
the form of either environmental influences or individual differences.
The environmental influences identified include: Culture; social class; personal influence; family and
situation.
While the individual influences include: Consumer resource; motivation and involvement; knowledge;
attitudes; personality; values and lifestyle .

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Entry to the model is through need recognition when the consumer acknowledges a discrepancy
between their current state and some desirable alternative. This process is driven by an interaction
between processed stimuli inputs and environmental and individual variables. After a need has been
acknowledged the consumer embarks on a search for information, both internally through the
consumers memory bank of previous experiences, and externally. The authors argue that the model is
suitable for use in explaining situations involving both extended problem solving and limited problem
solving by modifying the degree to which various stages of the model are engaged in by the consumer .
The depth of information search will be highly dependant on the nature of problem solving, with new or
complex consumption problems being subjected to extensive external information searches, while
simpler problems may rely wholly on a simplified internal search of previous behaviour.

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Information is said to pass through five stages of processing before storage and use, namely: exposure,
attention, comprehension, acceptance and retention.
The alternative consumer choices are evaluated by the establishment of beliefs, attitudes and purchase
intentions. This process of evaluation is influenced by both the environmental variables and the
individual variables. Intention is depicted as the direct antecedent to purchase which is the only outcome
tolerated by the model. Inhibitors are not explicitly depicted as mediating between intentions and
purchase, however the environmental and individual influences are again said to act on purchase.
Situation is listed as an environmental influence, and while this factor is not clearly defined, it could
include such factors as time pressure or financial limitations which could serve to inhibit the consumer
from realising their purchase intentions.
Consumption is followed by post-consumption evaluation which serves a feedback function into
future external searches and belief formation. Divestment is depicted as the final stage in the
consumption process acknowledging that the product purchased is likely to be disposed of at some point
post consumption.

Other way of Model Explanation:


Engel, Blackwell and Kollats Model: Engel-Blackwell-Miniard Model of Consumer Behavior
The Engel, Kollat and Blackwell Model, also referred to as the EKB model was proposed to organize
and describe the growing body of knowledge/research concerning consumer behavior. A
comprehensive model, it shows the various components of consumer decision making and the
relationships/interactions among them. The model went through many revisions and modifications,
with attempts to elaborate upon the interrelationship between the various components and subcomponents; and, finally another model was proposed in the 1990s which came to be known as the
Engel, Blackwell and Miniard Model (EBM). The model consists of five parts, viz. information input,
information processing, decision process stage, decision process variables, and external influences.
1. Information input: The information input includes all kinds of stimuli that a consumer is exposed to
and triggers a kind of behavior. The consumer is exposed to a large number of stimuli both marketing
(advertising, publicity, personal selling, demonstrations, store display, point of purchase stimuli) as

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well as non-marketing sources (family, friends, peers); thus the various stimuli compete for
consumers attention. These stimuli provide information to the consumer and trigger off the decision
making process.

2. Information processing: Stimuli received in the first stage provide information; the information is
processed into meaningful information. The stage comprises consumers exposure, attention,
perception/comprehension, acceptance, and retention of information. The consumer is exposed to
stimuli (and the accompanying information); attention determines which of the stimuli he will focus
upon; thereafter he would interpret and comprehend it, accepts it in his short term memory and retains
it by transferring the input to long-term memory.
3. Decision-process stage: At any time during the information processing, the consumer could enter
into this stage. The model focuses on the five basic decision-process stages, viz., problem recognition,
search, alternative evaluation, choice, and outcomes (post-purchase evaluation and behavior).
There is problem recognition; this is followed by a search for information, which may be internal based
on memory. The search of information is also impacted by environmental influences. Thereafter, the
consumer evaluates the various alternatives; while evaluation, belief lead to the formation of attitudes,
which in turn affect the purchase intention. The next stage is the choice and purchase, which gets
impacted by individual differences. Finally there is an outcome, in the form of satisfaction and
dissatisfaction. This outcome acts as a feedback on the input and impacts the cycle again.
Environmental influences, individual differences and social influences, directly and indirectly
influence each of the stages of the decision process.
However, EKB proposed that it is not necessary for every consumer to go through all the five stages; it
would depend on whether the problem is an extensive or a routine problem-solving behavior.

4. Decision process variables: The model proposes individual influences that affect the various stages
of the decision making process. Individual characteristics include constructs like demographics,
motives, beliefs, attitude, personality, values, lifestyle, normative compliance, etc.

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5. External influences: The model also proposes certain environmental and situational influences that
affect the decision making process. The environmental influences include Circles of Social
Influence, like culture, sub-culture, social class, reference groups, family and other normative
influences; situational influences include consumers financial condition
The decision process comprises five stages from need recognition to outcome. The outcome in the form
of satisfaction/dissatisfaction acts as the input in then next cycle of a similar purchase. Each of the
components is directly or indirectly impacted by environmental influences, individual differences and
social influences.
The model incorporates many constructs that impact consumer decision making. It tries to explain
clearly the interrelationships between stages in the decision process and the various variables. They
attempted to relate belief-attitude-intention. An attempt was made to define the variables and specify
functional relationships between the various constructs. However, the model fails to adequately
explain as to how each of these influences consumer decision making. Critics argue that there are too
many variables; these have not been defined; the model is vague and complex; and the validity of the
model has been questionable. The model was revised in the 1990s and proposed again as the Engel,
Blackwell and Miniard (EBM) model

The EKB model went through a series of revisions and modifications and finally it was proposed as the
Engel, Blackwell and Miniard Model. The model consists of four sections viz., information input;
information processing; decision process and variables influencing the decision process. The variables
and the working relationship is similar to the EKB but has been slightly modified.
Information received from marketing and non-marketing stimuli feeds into the information-processing
section of the model. The information section of the model comprises various stages like exposure,
attention, comprehension, acceptance and retention. After passing through these stages, it goes into the
memory. Then this information that is stored in the memory acts as an initial influence on the need
recognition stage. If internal information is inadequate there is a search for external information. The
model focuses on the decision process stages: need recognition, search, pre-purchase alternative
evaluation, purchase, consumption, post-purchase alternative evaluation and divestment. Divestment
as a construct was additionally added as a modification over the EKB model. Divestment relates to

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options of disposal, recycling or remarketing. The entire process is influenced by environmental


influences and individual differences.
Critique of the Consumer Decision Model
One of the key strengths of the Consumer Decision Model is that it has continued to evolve since
original publication in 1968, evolutions that should have improved the explanatory power of the model
in light of advances in consumer behaviour theory and knowledge. One such evolution is the inclusion
of such factors as consumption and divestment, embracing contemporary definitions of consumer
behaviour which include such stages of consumption in their scope .
The model provides a clear depiction of the process of consumption making it easy to comprehend and
intuitively pleasing . The mechanistic approach is, however, criticised to be too restrictive to adequately
accommodate the variety of consumer decision situations .
In parallel with the Theory of Buyer Behaviour, the influence of environmental and individual factors is
purportedly specific to certain process within the model. This is counter intuitive, and ignores other
impacts that such variables may have on the wider processes, for example, individual differences may
exert significant influence on the marketing stimuli a consumer is firstly exposed to and secondly, how
these stimuli are received and processed.
The environmental and individual variables have drawn criticism due to the vagueness of their definition
and role within the decision process ; for example the influence of environmental variables is identified,
but their role in affecting behaviour is not well developed. Further, the role of individual motives for
purchase is only alluded to within need recognition, appearing to somewhat neglect a rich theoretical
and important area of consideration .

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