Basic Model of

Consumer Behavior

Complete model of consumer behavior

Start
Need
recognition
Internal
search

Search

Exposure
Stimuli
(marketer
dominated,
other)

External
search

Attention
Comprehension

Memory

Alternative
evaluation

Acceptance

Purchase

Retention

Outcome
s

Dissatisfaction

Satisfaction

Influences
culture
social class
family
situation

Individual
differences
resources
motivation &
involvement
knowledge
attitudes
personality,
values,
lifestyle

Buying Process
Stage 1

Existent
State

Problem or need
recognition
Increase
Gap
Size

Desired
State

Increase Intensity of (Need) Want

Need Recognition
Marketing helps
consumers recognize
(or create) an
imbalance between
present status and
preferred state

When a current product isnt

performing properly
When the consumer is running
out of an product
When another product
seems State
Preferred
superior to the one currently used

ICEBERG EFFECT
The act of buying is 10%
visible effort

90% of buying process is

invisible
-

Problem recognition
Information search
Pre evaluation
Post Purchase education

Buying Process
Stage 2

Information
Search
Informatio
n Is
knowledge

The information search stage

An internal search involves the scanning
of one's memory to recall previous
experiences or knowledge concerning
solutions to the problem-- often sufficient
for frequently purchased products.

Personal sources
(friends and family)
Public sources (rating
services like
Consumer Reports)

An external search may be necessary

when past experience or knowledge is
insufficient, the risk of making a wrong
purchase decision is high, and/or the cost
of gathering information is low.

Marketer-dominated
sources (advertising
or sales people)

The

evoked set:

a group of
brands from which the buyer can
choose

Determinants of External Search

Information Gaps
Examples of Dells Customer Feedback

- Wheres the power button?

- Wheres the any key?
(Click any key to continue)
- fax wont work
- I refuse to read manual

Questions and
(Sometimes) Answers
(All Day Counts Include Weekends)
Web site

What we asked

What happened

Coca-cola How much caffeine

is in coke?

No response.

Reebok Is it dangerous to wear

running shoes to play
basketball?

Four weeks later

Information Overload
With

greater amounts of information

available, Consumers make poorer
choices (Threshold effects)
Tactic:
focus on product information
(features) that is important (salient)
to consumers

Information Wear out

Repetition

increases consumer learning

Too

much repetition = wear out

(consumers decrease attention over time)
Tactic:
Change

information and/or format

Pictures are better than words

Information search leads to a

Consideration Set of Brand Alternatives
All brands in a product
class
Unknown
brands
Brands
found
accidentally

Known
brands

Brands
found
through
search

Consideratio
n set of
brand
choice

Evoke
d set

Unrecalle
d brands

+ I like
o Neutral
- I dislike

Buying Process
Stage 3

Evaluation of
Alternatives

Utility Theory - Consumers perform

rational, quantitative calculations
to
maximize personal utilities ..
economic, behavioral & societal.

3 Major Evaluation
Criteria
Economic: cost/performance
Behavioral: prestige/status/peer
influence/lifestyle
Societal: product externalities
environmental effects

Lots of storage

societys long run welfare

Performance

Safety
Variety of
colors

Evaluation Criteria
Evaluation criteria change over time
and among market segments.
Promotions frame
certain product attributes
(evaluation criteria) to
influence their perceived
relative importance

Stage 4

WHO BUYS?
WHAT?
WHEN?
WHERE?
AND WHY?

Outlet Selection &

Purchase

Influences on Purchase
Decisions
Purchase

Situation(s)
Usage (Social or Private)
Time Perspective (long or
short)
Resource Capabilities
Level of personal control

OUTLET SELECTION
OUTLET - TO ANY SOURCE OF PRODUCTS OR SERVICES FOR
THE CONSUMERS
TYPES OF OUTLETS:

STORE BASED (BRICK & MORTAR): RETAIL SHOPS,

SUPERMARKETS, MALLS, CHAIN STORES, DISCOUNT
STORES ETC
NON-STORE BASED: INTERNET PORTALS, CATALOG SHOPS,
TELE-SHOPS ETC.

ABOVE DISTINCTION COULD SOMETIMES BE BLURRED

(PIZZA, MILK ETC)

SOME FACTORS WHICH INHIBIT IN-HOME SHOPPING ARE:

IN-HOME SHOPPING REFERS TO SHOPPING FROM

COMFORT OF HOME/ OFFICE AT NON-STORE OUTLETS .

THE

CUSTOMERS INABILITY TO TOUCH & FEEL GOODS

ABSENCE OF PHYSICAL ACTIVITY/ EXCITEMENT OF GOING
SHOPPING
ABSENCE OF SOCIAL INTERACTION (BARGAINING/
INTERACTING WITH FELLOW SHOPPERS ETC.)
TRANSACTION SECURITY

DESPITE THESE INHIBITORS, THE SHARE OF NON-STORE

BASED OUTLETS, PARTICULARLY THE INTERNET BASED
ONES, IS RAPIDLY GROWING.

Factors Determining the Store

Choice
1. Store Location
Intercity Choice (Outshoppers and nonoutshoppers)
Intracity Choice (Shopping Center Model- The model
estimates
the probability
of
that
shoppers
in
homogeneous geographical segments will visit a
particular shopping center for a particular type of
purchase. Two fundamental parameters in this are square
feet of floor space in the shopping center and travel time
to the center.)
Interstore Choice

2.Store Design and Physical facilities (Positive

moods can increase the time spent in the store and
willingness to interact with the salesperson).
3. Merchandise (quality, selection or assortment,
styling or fashion, guarantees and pricing)
4. Advertising and sales promotion
5. Personnel
6.Customer Services (Increase product satisfaction,
increase convenience, provide special benefits)
7. Clientele

General Shopper Profiles (Anti Shoppers)

Store specific shoppers profile (Traditional
Department, National Chain Department,
Discount Department)
Store loyalty (Engage in less comparison)

In-store Purchasing Pattern:

Merchandising Techniques:
Store Layouts and traffic Patterns(Passing and buying Ratio)
Point of Purchase media
Product Shelving (Shelf height & Shelf space)

Pricing

Strategies
Price Awareness
Promotional Pricing
Couponing
Packaging
Brand Choice: National Vs. Private
Position of Private Brands
Generic Brands

RISK PERCEIVED BY THE CONSUMER

WITH REF. TO AN OUTLET

RISK IN THE CONTEXT OF OUTLETS COULD BE

SOCIAL RISK (I.E. NEGATIVELY VIEWED BY
FRIENDS/ GROUPS ROADSIDE SHOPS, DISCOUNTS/
SECONDS STORES ETC) OR
ECONOMIC RISK (I.E. RELATING TO PRICE, QUALITY
ETC HIGH MARGINS, PRICING BASED ON SNOB
VALUE, POSSIBILITY OF FRAUD ETC)

CONSUMERS OWN SHOPPING ORIENTATION/

SHOPPING PROFILE
INHERENT PSYCHOGRAPHIC PROFILE OF THE SHOPPER, LIKE:
INACTIVE SHOPPER (BUY BECAUSE THEY HAVE TO; DO NOT
ENCOURAGE SALES TALK; JUST PICK-UP, PAY AND GET OUT TYPES)

BARGAIN OR

ACTIVE SHOPPER (OPPOSITE OF ABOVE; LIKE TO SHOP AROUND;

ENGAGES STORE ASSISTANTS EXTENSIVELY)
SERVICE SHOPPER (SEEK HIGH LEVEL OF SERVICE/ ATTENDANCE
PURCHASING)

WHILE

TRADITIONAL SHOPPER (SOMEWHERE IN BETWEEN ACTIVE AND

INACTIVE TYPES OF SHOPPERS)
FRINGE SHOPPERS (SEEKING NEW PRODUCTS; LIMITED BRAND/ STORE LOYALTIES)
PRICE SHOPPERS (BARGAIN HUNTERS)

FROM THE FOREGOING DISCUSSION ON

CONSUMER PROFILES, IT ARISES THAT,
STORES CAN DESIGN SEGMENT SPECIFIC
MARKETING
TACTICS:
EX:
INACTIVE
SHOPPERS MIGHT RESPOND WELL TO
HOME DELIVERY; ACTIVE ONES MIGHT
RESPOND
WELL
TO
LIVELY
STORE
AMBIENCE.

Purchase Decisions
Consumers

dislike making
decisions/choices
Tactic: Show satisfied customers
ordinary people
experts
celebrities

Buyer Behavior
Other people often influence a consumers purchase
decision. The marketer needs to know which people are
involved in the buying decision and what role each person
plays, so that marketing strategies can also be aimed at
these people. (Kotler et al, 1994).

Initiator: the person who first suggests or thinks of the idea of buying
a particular product or service.

Influencer: a person whose views or advice carry weight in making

the final buying decision

Decider: the person who ultimately makes the final buying decision or
any part of it

Buyer: the person who makes the actual purchase

User: the person who consumes the product or service
Note: teens are increasingly assuming more of these roles

Think about your past purchase who was in which role?

Wife
Dominant

Relative influence of husbands & wives

Child clothing

Final
decision

Information
search

groceries

Womens
clothing

Pots & pans

NonRx

lamps

Toys/games

furniture
luggage
carpet

Paint wallpaper

refrigerator
vacations

Mens leisure clothing

Joint

Mens business clothing

TV sets

stereo
camera
Financial planning

Family car

Sport equipment
hardware
Lawn mower

Husband
Dominant

Extent of role specialization

100

75

50

25

Consumer decision making varies

with the level of involvement in the
purchasing decision

Extensive: problem solving occurs when

buyers purchase more expensive, less
frequently purchased products in an
unfamiliar product category requiring
information search & evaluation; may
experience cognitive dissonance.
Limited: problem solving occurs when buyers are
confronted with an unfamiliar brand in a familiar
product category

Routine: response behavior occurs

when buyers purchase low cost, low risk, brand loyal,
frequently purchased, low personal identification or
relevance, items with which they are familiar.

Increase in
Consumer
evaluation
processes

Factors affecting
Consumer involvement
Previous experience: low level involvement
Interest: high involvement
Perceived risk of negative consequences: high involvement
Situation: low to high due to risk
Social visibility: involvement increases with product visibility

So
Offer extensive information on high involvement products
In-store promotion & placement is important for low involvement products
Linking low-involvement product to high-involvement issue can increase sales

Buying Process
Stage 5

Cognitive

Post-Purchase
Behavior

dissonance: postpurchase tension .

Postpurchase Behavior
Cognitive
Dissonance

Did I make a good decision?

Did I buy the right product?
Did I get a good value?

Marketing

Can minimize through:

Effective Communication
Follow-up
Guarantees
Warranties
Underpromise &
overdeliver

Sour Grapes
a story of
cognitive dissonance

after being unable to reach the grapes the fox said,

these grapes are probably sour, and if I had them I would
not eat them.
--Aesop

Post Purchase Behavior

Product Experience

Actual
Benefits

Actual
Expectations
Gap
Size

Satisfied

Dissatisfied

Post Purchase Behavior

Dissatisfied customers
communicate more negative
word of mouth than satisfied
customers communicating
positive word of mouth
Principle:

Post Purchase Behavior

Cognitive Dissonance

Lack of confidence (doubts)

about the correctness of a
prior purchase decision and
efforts to reconcile doubts
Did I Do the Right
Thing?

Cognitive Dissonance

Causes: Perceived Risk

Performance risk
Physical risk (wear-out)
High financial commitment
High involvement level
High social visibility
Information Overload

Cognitive Dissonance

Potential Reactions
Return product
Seek confirming information

Marketing Tactic
Provide post decision positive
information