Consumer Behavior Models

A model a is simplified version of reality.

OBJECTIVES
Understand the concept of modeling within consumer behaviour studies; Evaluate the applicability of traditional models of consumer behaviour; Evaluate the applicability of contemporary models of consumer behaviour.

Models and theory

Theory: an interrelated set of concepts, definitions and positions that presents a systematic view of phenomenon (Loudon and Della Bitta, 1993) Theory has 4 functions, to:

Types of models
Algebraic models: Fishbeins Attitude Model
n

Ao==biei
i=1

Ao= the persons overall attitude towards the object bi= the strength of his belief that the object is related to attribute I (e.g. ASDA is good value for money) ei= his evaluation or intensity of feelings (liking or disliking) toward attribute i n= the number of relevant beliefs for that person

Types of models(contd.)

Types of models(contd.)
Personal Variable Models: Adapted from Ajzens Theoty of Planned Behaviour( 1991

Types of models(contd.)

Traditional Models of consumers

Early models derive from economics and were interested in studying how scarce resources are allocated to quench and unlimited amount of wants and needs (Loudon and Della Bitta, 1993) Macroeconomics Microeconomics

Traditional Models of consumers

MICROECONOMICS
Concentrates on the act of purchasing Interested in knowing what consumers were purchasing, ignoring the why and how underpinning their behaviour.

MICROECONOMICS
Assumptions made:
Consumers wants unquenchable and needs are unlimited and

Consumers allocate their resources to maximise levels of satisfaction Consumers have perfect knowledge The additional satisfaction of a unit that is bought after the first purchase will be less than the first purchases marginal satisfaction Price is key Consumers rational

Behavioural economics (from Loudon and Della Bitta, 1993)

George Katona introduces the need to look at psychological influences guiding consumers behaviour: behavioural economics Consumers will purchase products when they have confidence in the economy (consumer sentiment)

The KatonaModel

Contemporary Models

Nicosia Model (1966)

Limitations
Incomplete in a number of aspects, very reductionist Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance: What type of consumer are we talking about? The company and the consumer have an existing relationship? What type? Is this for a new product? Is this the first exchange the consumer has had with the producer? The model cannot be validated, according to Foxall(1980) it is pre-scientific

HOWARD-SHETH MODEL

LIMITATIONS
Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance:
Sharp distinctions between exogenous and other variables have not been made The model cannot be generalised, it cannot be applied to co-joint decision making for example Can this model be applied for non-branded products?

The model cannot be validated, Foxall(1980) it is pre-scientific

according

to

ENGEL-BLACKWELL-MINIARD MODEL

LIMITATIONS
Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined The model is vague (Loudon and Della Bitta, 1993) Key variables are vaguely defined
How do environmental variables affect consumers behaviour? How do motives influence consumers behaviour?

It is a mechanical overview of human behaviour Can this model be applied for non-branded products? Goods? Services? The model cannot be validated, according to Foxall(1980) it is pre-scientific

CONCLUTIONS
A model presents phenomena in such a way that it can be easily communicated Models are just representative of reality, they are not reality There are different types of models (black box, conceptual, algebraic, personal variable and comprehensive models) The Nicosia, Howard-Shethand the Engel, Kollatand Blackwell model have all been criticised on the grounds that they are pre-scientific

CONCLUTIONS
Models operate on the assumption that all human behaviour is rational All models are mechanistic