Consumer Decision Making: four views of consumer

decision making (Economic man, Cognitive

man, Emotional man, Passive man)

What is a Model• A model is very often referred to as an abstract

representation of a process or relationship . • Models help us in the following ways: They help in the development of theories They help to understand complex

relationship They provide the framework for discussion

and research work In this chapter we will examine the various models having relevance to consumer decision making process. The primary concern is to use the models to understand consumer behavior.

Different Models in CBThe economic modelThe Learning modelPsychoanalytic modelThe sociological modelThe Howard Sheth model of Buyer BehaviorThe Nicosia modelWebstar and Wind model of organisational buying

behaviorThe Engel-Kollat-Blackwell modelThe Seth model of Industrial Buying

Economic Man• Under economics, it is assumed that man is a

rational being, who will evaluate all the alternatives in terms of cost and value received and select that product/service which gives him/her maximum satisfaction (utility).

• Consumers are assumed to follow the principle of maximum utility based on the law of diminishing marginal utility.

• It is assumed that with limited purchasing power, and a set of tastes and needs, a consumer will allocate his/her expenditure over different products at given price so as to maximise utility.

• The law of equimarginal utility enables him to secure maximum utility from limited purchasing power.

• Economic model of consumer behavior is one dimensional. This means that buying decisions of a person are governed by the concept of utility. Being a rational man one will make his purchase decision with the intention of maximising the utility/benefits.

• Economic model is based on certain predictions of buying behavior.

Price effect Substitution effect Income effect

• The assumptions about the rational behavior of human being have been challenged by the behavioural scientists.

• They are of the opinion that while the predictions are useful, the model only explains how a consumer ought to behave. It does not throw light on how does the consumer actually behave.

• Behavioural scientists argue that the economic model is incomplete. Economics is assuming the market to be homogeneous, and that buyers will think and act alike. Buyers will only concentrate on one aspect of the product i.e., income.

• This model ignores all other aspects such as perception, motivation, learning, attitude, personality and socio cultural factors.

• It has always been agreed upon that man is a complex entity, a puzzle, a riddle. Hence it is very important to have a multi disciplinary approach to understand consumer behavior.

• Further, in today’s environment, apart from the various psychological, socio cultural determinants of the consumer, it has been observed that the consumer also gets influenced by other marketing variables, namely- product, effective distribution network and marketing communications

• Thus consumer can’t be to be rational person and price is not the only factor which influence his purchase decision.

• Behavioural scientists have opinioned that a boarder perspective has to be taken while trying to analyse buying behavior, not only economics but the role played by needs, motives, personality and self concepts and socio cultural factors should be considered to understand buyer behavior.

Learning Model• Unlike the economists, classical psychologists have been

interested in the formation and satisfaction of need and tastes.

• They argue that living beings were influenced by both innate needs such as the primary needs of hunger, thirst, sex, shelter and learned needs like fear and guilt.

• A drive(internal stimulus) which when directed towards a drive reducing object become a motive. The various products and services will act as stimulus to satisfy drives. For example, a hungry person will be driven towards food, which after consumption will reduce the drive and provide satisfaction.

• According to learning theorists, this response of satisfaction (feeling) reinforces the relationship between the drive and drive reducing stimulus object as well as the the related cues. Further, the consumer learns to associate connections between stimulus and response, it becomes habit.

• There are certain cognitive theorists, who have advocated that human beings not only learn to link stimulus with response (S-R) but also results in the formation of other cognitive process such as attitude, values, beliefs, motivations, etc.

• In marketing contexts, learning helps marketers to understand how consumers learn to respond in new marketing situations, or how they have learned and responded in the past in similar situations.

• Very often it is observed that consumer’s experience with one product from a firm is likely to be generalised to the other products of the firm.

• Conversely, consumers also learn to discriminate and this information will be useful in working out different marketing strategies.

• Simply stated this learning model will help marketers to promote association of products with strong drives and cues and positive re-enforcements.

Psychoanalytical model• This model is based on the work of psychologists who

were concerned with personality. They were of the view that human needs and motives operated at the conscious as well as sub-conscious levels.

• This theory is developed by Sigmund Frued. • Human behaviour (personality) is the outcome of Id- the source of all psychic energy which drives us as

action.Super ego- the internal ego representation of what is

approved by the societyEgo- the conscious directing id impulses to find

gratification in a socially accepted manner. Thus, we can say that human behavior is directed by a complex set of deep seated motives.

• From marketing point of view this means that buyers will be influenced by symbolic factors in buying a product.

• Motivational research has been involved in investigating motives of consumer behavior so as to develop suitable marketing implications accordingly.

• Marketers have been using this approach to generate ideas for developing products- design, advertising and other promotional techniques.

Sociological Model• According this model the individual buyer is a part of 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 in influencing his buying behavior.

• Intimate groups comprising of family, friends, and close colleagues exercise a strong influence on the life style and buying behavior of an individual member. The peer group plays a very important role in acting as an influencing factor especially adopting particular life style and buying behaviour pattern.

• Similarly, depending on the income, occupation, place of residence etc. each individual member is recognised as belonging to 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 behaviour pattern.

• So an individual member will adopt the role suitable to confirm to the style and behavioural pattern of the social class to which he/she belongs.

• The marketer through the process of market segmentation can work out on the common behaviour pattern of a specific class and group of buyers and try to influence their buying pattern.

Passive Man• Quite opposite to the rational economic view of

consumers is the passive view that depicts the consumer as basically submissive to the self serving interests and promotional efforts of marketers.

• In the passive view, consumers are perceived as impulsive and irrational purchasers, ready to yield to the aims and into the arms of marketers.

• At least to some degree, the passive model of the consumers was subscribed to by the hard-driving super sales people of old, who were trained to regard the consumer as an object of manipulated.

• The principal limitations of the passive model is that it fails to recognise that the consumer plays an equal, if not dominant, role in many buying situations – sometimes by seeking information about product alternatives and selecting the product that appears to offer the greatest satisfaction and at other times by impulsively selecting products that satisfy the mood or emotion of the moment.

• The influence motivation, selective perception, learning, attitude, communication and opinion leadership serves to support the proposition that consumers are rarely objects of manipulation. Therefore, this simple and single minded view should also be rejected as unrealistic.

The Cognitive Model • Cognitive model portrays the consumer as a thinking

problem solver. • Within this framework, consumers frequently are pictured

as either receptive to or actively searching for products and services that fulfill their needs and enrich their lives.

• The cognitive model focuses on the processes by which consumers seek and evaluate information about selected brands and retails outlets.

• Within the context of the cognitive model, consumers are viewed as information processor.

• Information processing leads to the formation of preferences and , ultimately, to purchase intentions.

• The cognitive view also recognises that the consumer is unlikely to even attempt to obtain all available information about every choices. Instead, consumers are likely to cease their information-seeking efforts when they perceive that they have sufficient information about some of the alternatives to make a satisfactory decision. As this information-processing viewpoint suggests, consumers often develop shortcut decision rules (called heuristics) to facilitate the decision making process. They also use decision rules to cope with exposures to too much information ( information overload).

An Emotional Man• Each of us is likely to associate deep feelings or emotions,

such as joy, fear, love, hope, sexuality, fantasy, and even a little magic, with certain purchases or possessions. These feelings or emotions are likely to be highly involving. For instances, a lady who misplaces a favorite ear ring might go to great length to look for it, despite the fact he or she has has six other at hand.

• If we were to reflect on the nature of our recent purchases, we might be surprised to realise just how impulsive some of them were. Rather than carefully searching, deliberating , and evaluating alternatives before buying, we are just as likely to have made many of these purchases on impulse, on a whim, or because we were emotionally driven.

• When a consumer makes what is basically an emotional decision, less emphasis is placed on the search for prepurchase information. Instead, more emphasis is placed on current mood and feelings. This is not say that emotional decisions are not rational decisions.

• The cognitive, or problem-solving, view describes a consumer who falls some where between the extremes of the economic and passive views, who does not ( can not) have total knowledge about available product alternatives and, therefore, can not make perfect decisions, but who nonetheless actively seeks information and attempts to make satisfactory decisions.

• Consistent with the problem solving view is the notion that a great deal of consumer behavior is goal oriented.

• Goal setting is especially important when it comes to the adoption of new products because the greater the degree of newness the more difficult it would be for the consumer to evaluate the product and related it to his or her need.