Dr.

Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat

UNIT - I

Syllabus

 Nature and scope of consumer behaviour

 Consumer Decision Making: four views - Economic man, Cognitive man, Emotional man,
Passive man
 Consumer Decision process
 Factors influencing consumer decision making process
 Comprehensive models of consumer decision making:
- Nicosia Model,
- Howard-Sheth model,
- Engel-Kollat-Blackwell model
- Sheth’s Family decision making model
***************************************************************************************

MEANING & DEFINITION OF CONSUMER BEHAVIOUR

 Consumer is a person who evaluates, uses and disposes a good/service to satisfy a need.
 Customer is the person who actually purchases the product.
 Consumer behaviour is the study of how individual customers, groups or organizations
select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants.
 According to Engel, Blackwell, and Mansard, ‘Consumer behaviour is the actions and
decision processes of people who purchase goods and services for personal consumption’.

NATURE OF CONSUMER BEHAVIOUR

1. Influenced by various factors:

 The various factors that influence the consumer behaviour are;
a) Marketing factors such as product design, price, promotion, packaging, positioning and
distribution.
b) Personal factors such as age, gender, education and income level.
c) Psychological factors such as buying motives, perception, beliefs and attitudes towards
the product.
d) Situational factors such as physical surroundings at the time of purchase, social
surroundings and time factor.
e) Social factors such as social status, reference groups and family.
f) Cultural factors, such as religion, social class - caste and sub -castes.

2. Undergoes a constant change:

 Consumer behaviour is not static. It undergoes a change over a period of time depending
on the nature of products.
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Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari Mob - 9586075954
 Dr. Zakir Patel, Prof, Naran Lala College of Commerce & Management, Navsari, Gujarat

 Example - Kids prefer colourful and fancy footwear, but as they grow up as teenagers and
young adults, they prefer trendy footwear, and as middleaged and senior citizens they
prefer more sober footwear.
 The change in buying behaviour may take place due to many other factors such as increase
in income level, education level and marketing factors.

3. Varies from consumer to consumer:

 All consumers do not behave in the same manner. Different consumers behave differently.
 The differences in consumer behaviour are due to individual factors such as the nature of
the consumers, lifestyle and culture.
 Example - Some consumers are technoholics. They go on a shopping and spend more than
what they have. They borrow money from friends, relatives, banks, and sometimes even
adopt unethical means to spend on shopping of advance technologies.
 But there are other consumers who, despite having surplus money, do not go even for the
regular purchases and avoid use and purchase of advance technologies.

4. Varies from region to region and country to county:

 The consumer behaviour changes across states, regions and countries.
 Example - The behaviour of the urban consumers is different from that of the rural
consumers. Many times rural consumers are conservative in their buying behaviours. The
rich rural consumers may think twice to spend on luxuries even if they have sufficient
funds, whereas the urban consumers may even take bank loans to buy luxury items such as
cars and household appliances.
 The consumer behaviour may also change across the states, regions and countries. It may
differ depending on the upbringing, lifestyles and level of development.

5. Information on consumer behaviour is important to the marketers:

 Marketers need to have a good knowledge of the consumer behaviour.
 They need to study the various factors that influence the consumer behaviour of their
target customers.
 The knowledge of consumer behaviour enables them to take appropriate marketing
decisions regarding following factors:
a. Product design/model d. Packaging
b. Pricing of the product e. Positioning
c. Promotion of the product f. Place of distribution

6. Leads to purchase decision:

 A positive consumer behaviour leads to a purchase decision.
 A consumer may take the decision of buying a product on the basis of different buying
motives. The purchase decision leads to higher demand, and the sales of the marketers
increase.
 Therefore, marketers need to influence consumer behaviour to increase their purchases.

7. Varies from product to product:

 Consumer behaviour is different for different products. There are some consumers who
may buy more quantity of certain items and very low or no quantity of other items.
 Example - teenagers may spend heavily on products such as cell phones and branded
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wears for snob appeal, but may not spend on general and academic reading. A middle-
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 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

aged person may spend less on clothing, but may invest money in savings, insurance
schemes, pension schemes, and so on.

8. Improves standard of living:

 The buying behaviour of the consumers may lead to higher standard of living.
 The more a person buys the goods and services, the higher is the standard of living. But if a
person spends less on goods and services, despite having a good income, they do not
upgrade their standard of living.

9. Reflects status:
 The consumer behaviour is not only influenced by the status of a consumer, but it also
reflects it. The consumers who own luxury cars, watches and other items are considered
belonging to a higher status.
 The luxury items also give a sense of pride to the owners.

SCOPE OF CONSUMER BEHAVIOUR

1) Consumer behaviour and marketing management:

 Effective business managers realise the importance of marketing to the success of their
firm.
 A good understanding of consumer behaviour is necessary to the long run success of any
marketing program.
 It is an important orientation of philosophy of many marketing managers.
 The essence of the Marketing concept is about understanding Consumer needs and wants
and satisfying it better than competitors.

2) Consumer behaviour and Non-profit and social marketing:

 In today's world even the non-profit organisations like government agencies, religious
organisations, universities and charitable institutions have to market their services for
ideas to the target group of consumers or institution.
 These groups are required to appeal to the general public for support of certain causes or
ideas.
 They also make their contribution towards removal of the social problems of the society.
 Thus a clear understanding of the consumer behaviour and decision making process is
necessary for such activities.

3) Consumer behaviour and government decision making:

 Consumer behaviour principles have influenced government services also;
i) Government services: Many governmental services can be improved after
understanding consumer behaviour principles.
ii) Consumer protection: Many Agencies at all levels of government are involved with
controlling business practices for protecting consumer welfare.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

4) Consumer behaviour and de-marketing:

 Consumers are now entering an era of scarcity in terms of some natural gas and water.
Because of the scarcity, it is important to promote conservation of these resources and
stop or reduce consumption. This is known as demarketing.
 The term "de-marketing" refers to all such efforts to encourage consumers to reduce their
consumption of a particular product or services.
 Consumers have been encouraged to decrease or stop their use of particular goods that
have harmful effects. Example - Marketing programs designed to reduce drug abuse,
gambling etc.
 These actions have been undertaken by government agencies, non-profit organisations,
and other private groups.

5) Consumer behaviour and Consumer education:

 Consumer also benefit directly from investigations of their own behaviour. This can occur
on an individual basis or as part of educational programs. For example, when consumers
learn that a large proportion of the billions spend annually on grocery products is used for
impulse purchases and not spend according to pre-planned shopping list, consumers may
be more willing to plan effort to save money.

IMPORTANCE OF CONSUMER BEHAVIOR

1) Production policies: The study of consumer behaviour affects the production policies of the
Company. Consumer behaviour discovers the habits, tastes, and preferences of consumers
and such discovery enables the Company to plan and develop its products according to these
specifications. It is necessary for an enterprise to be in continuous touch with the changes in
consumer behaviour so that necessary changes in products may be made.

2) Price policies: Buyer behaviour is important in having price policies. The buyers of some
products purchase only because particular goods are cheaper than the competitor’s goods
available in the market.

3) The decision regarding channels of distribution: The goods, which are sold and solely on the
basis of low price mast and economical distribution channels. In the case of those articles,
which week T.V. sets, refrigerators, etc. Must have different channels of distribution. Thus,
decisions regarding channels of distribution are taken on the basis of consumer behaviour.

4) A decision regarding sales promotion: Study of consumer behaviour is also vital in making
decisions regarding sales promotion. It enables the producer to know what motive prompt
consumers to make purchases and the same are utilized in promotional campaigns to awaken
a desire to purchase.

5) Exploiting marketing opportunities: Study of consumer behaviour helps the marketers to

understand the consumer’s needs, aspirations, expectations, problems, etc. This knowledge
will be useful to marketers in exploiting marketing opportunities and meeting the challenges
of the market.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

6) Consumers do not always act or react predictably: The consumers of the past used to react
to price levels as if price and quality had positive relations. Today, week value for money,
lesser price but with superior features. The consumer’s response indicates that the shift had
occurred.

7) Highly diversified consumer preferences: This shift has occurred due to the availability of
more choice now. Thus the study of consumer behaviour is important to understand the
changes.

8) Rapid introduction of new products: Rapid introduction of new products with technological
advancement has made the job of studying consumer behaviour more imperative. For
example, information technologies are changing very fast in the personal computer industry.

9) Implementing the “Marketing concept: This calls for studying consumer behaviour, all
customers need have to be given priority. Thus identification of target market before
production becomes essential to deliver the desired customer satisfaction and delight.

CONSUMER DECISION MAKING – 4 VIEWS

Meaning of Consumer decision making

 A decision is the selection of an action from among two or more alternatives.
 Consumer Decision Making refers to the process under which consumers go through in
deciding what to purchase, including problem recognition, information searching,
evaluation of alternatives, making the decision and post-purchase evaluation.
 Different models of consumer decision making / consumer behaviour can be understood
from four different angles. They are 4 different views about consumer behaviour. They
are;

1. Economical View / Model:

 Traditionally, economics is considered as the mother discipline of marketing.
 Economists believe that consumers derive some utility (a feeling of satisfaction) from
consuming a particular product. Hence, all consumers try to maximise the utility from
consuming the product/service.
 Hence, if consumers are given a certain amount of purchasing power, and a set of needs
and tastes, he/she will allocate the expenditure over different products at given prices
rationally in order to maximise utility.
 Economists also state that the utility from the consumption of a certain product
diminishes (reduces) as the quantity of the product consumed increases (Principle of
Diminishing Marginal Utility).
 According to this model it is also possible to make a number of predictions about the
consumer behaviour in terms of the price-effect, income effect and substitution-effect.
Criticism:
 The Consumer may not be- (a) aware of the various product alternatives or (b) in a
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position to evaluate all the advantages and disadvantages related to the various product
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

alternatives in order to rank them accordingly. Thus it will not be possible for the
consumer to make the rational or perfect decision.
 It has been criticised that the economic view is too idealistic and simplistic.
 It is being argued that consumers may not decide on the basis of maximum utility concept.
Sometimes, consumers may not select the best alternative. They may go for another good
alternative too.
2. Passive View / Model:
 According to Passive model of consumer behaviour, Consumers behave according to the
promotional efforts made by the marketers.
 According to passive view, consumers are perceived to be impulsive who take irrational
purchase decisions and are influenced by the promotional offers of the marketers.
Criticism:
 it fails to take a pragmatic view of the consumers. It is argued that in a buying situation,
the consumer will be involved in a decision making process where he collects information
on the product, evaluates all the alternative brands and then makes a selection based on
the brand which provides him maximum satisfaction. Sometimes the consumer’s purchase
decision is also based on emotions or moods. So it is wrong to assume that the consumer
will be passive while taking purchase decisions.

3. Cognitive View / Model:

 As a consumer, man is usually involved in thinking and problem solving.
 He is constantly involved in an active search for goods and services which will not only
satisfy his needs but enrich his life also.
 As per the cognitive view consumers are involved in an information seeking and
processing method.
 They try to gather all the necessary information from various sources, such as a trusted
friend, or an expert and so on. Once he feels that he has sufficient information, so as to
make a ‘satisfactory choice decision’, he will stop to gather more information and will
ultimately decide on his purchase intention.
 This model of man as a thinker, views consumer as an information processor. And all the
focus is on the processes by which consumers collect and evaluate information about the
products/services.
 Example - The advertisement on Panasonic TV can work as a cognitive appeal to
customers who are looking for information for purchasing premium quality television. The
ad provides information on the technology benefits in terms of V-Real Technology,
Advanced Smart Sound Speaker System and HDAVI control offered by the Panasonic
brand of TV Series.
 Thus according to the cognitive model of consumer, the above mentioned ad will make
the consumer think on the benefits of Panasonic TV. The consumer will finally take the
purchase decision based on his satisfaction of the information received.

4. Impulsive or Emotional View:

 Consumers can be emotional or impulsive while taking purchase decisions. For such
emotional buying, the consumer may not undergo the usual process of carefully
searching, evaluating and then deciding on the brand to purchase. Instead, he is more
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likely to purchase the product (brand) based on a an impulse.

Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

 Such consumer decisions are said to be ’emotionally driven’.

 For emotional or impulse purchases, it is the mood and feelings of the consumer which
will decide on the emotional purchase decision.
 Emotional decisions could be rational to some extent also. That is, the consumer may take
an emotional decision to purchase a product but he will be rational while deciding or
choosing one brand over another.
 This type of behaviour is displayed while making purchases of apparel, gifts, selecting
holiday destinations or toys (for children).
 In all the above situations, the final decision may be made on the basis of emotion.
 Advertisers are promoting their products or services in a way to appeal to the emotions of
the particular target market.
 Such emotional appeals can be seen in the advertisements of Johnson and Johnson baby
products, Huggies diaper, Wipro Baby Soft, Fisher Price toys etc.
 Related to consumers emotions and feeling is the ‘mood’ of the person.
 Mood may be defined as a feeling state or state of the mind. The basic difference between
an emotion and a mood is that the emotion is a response to a particular environment,
while mood is an unfocused, pre-existing state-already present, when the consumer gets
motivated or experiences a positive feeling about an advertisement or brand or a product.
 Moods play an important role in consumer decision making. Very often it is the mood of
the consumer which influences his decisions related to when to shop, where to shop, in
whose company to shop etc.
 It has been observed that even within the shopping environment, the interior decor, the
attitude of the sales persons, the type of services provided etc. could affect the mood and
influence the consumer’s decision on how long to shop and on how often to go to that
shop.
 Therefore, nowadays retailers and dealers are creating a positive store image. This can
have a positive influence on the consumer’s mood and decision to purchase.

PROCESS OF CONSUMER DECISION MAKING (5-STAGE

MODEL)

Consumers go through the following five steps while buying any product:

Stage-1 Stage-2 Stage-3 Stage-4 Stage-5

Need Information Evaluating Purchase Post-Purchase
Recognition Search Alternatives Decision Behaviour

(1) NEED RECOGNITION

 Buying process begins when a person begins to feel that a certain need or desire has
arisen. The need may be activated by internal or external factors. This is known as stimuli.
 Stimuli can be external or internal. Eg. Advertisements, sweet aroma (sweet smell) of cake
outside the bakery etc. are examples of external stimuli. Thirst, hunger etc are internal
stimuli.
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 Marketers (Companies) are more concerned about the external stimuli of a person since
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they can influence the external stimuli and not the internal stimuli.
Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

 The speed with which a person will move to fulfil the want depends upon the intensity of
the want. The buyer will postpone the less important need.

(2) INFORMATION SEARCH

 The need that has arisen can be satisfied when the desired product is not only known but
also easily available. But when it is not clear what type of brand can offer best satisfaction,
the person will have to search to obtain the product.
 Consumers will search for information from two major types of sources – internal and
external.
 Internal source means that consumers will collect information from his/her
own experience as the consumer might have purchased similar product in
past. This will help them in collecting information about the product.
 External sources of information can be of following types;
(a) Personal sources - family, friends, neighbours etc.
(b) Commercial sources - advertising, sales persons, dealers, package etc.
(c) Public sources - mass media (like TV, radio, newspapers), consumer rating organisations
(d) Experiential sources - personally using the product (like test-driving in case of
automobiles)
 Generally speaking, the consumer receives the most information about a product from the
commercial sources. But the most effective information comes from personal sources.
Each of the above information sources performs different function in influencing the
consumer’s buying decision.
 Marketers provide the necessary information through their salesmen, advertisements,
dealers, packaging, sales promotion etc. Mass media like newspapers, radio and television
also provide information.

(3) EVALUATING ALTERNATIVES

 Once the information is collected, the consumer will be able to evaluate the different
alternatives that offer to him, evaluate the most suitable to his needs and choose the one
he think it’s best for him.
 The consumer will evaluate features on two aspects. The objective characteristics (such as
the features and functionality of the product) but also subjective (perception
and perceived value of the brand by the consumer or its reputation).
 Each consumer does not give the same importance to each feature for his buying decision.
Mr. XYZ may prefer a product for the reputation of the brand X rather than a little more
powerful but less known product.
 The consumer will then use the information previously collected and his perception or
image of a brand to establish a set of evaluation criteria, desirable or wanted features,
classify the different products available and evaluate which alternative has the most
chance to satisfy him.
 This process will lead to “evoked set”. “The evoked set” (“consideration set”) is the set of
brands or products with a probability of being purchased by the consumer (because he has
a good image of it or the information collected is positive).
 “Inept set” is the set of brands or products that have no chance of being purchased by the
consumer (because he has a negative perception or has had a negative buying experience
with the product in the past). While “inert set” is the set of brands or products for which
the consumer has no specific opinion.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

(4) PURCHASE DECISION

 While the consumer is evaluating the alternatives, she / he will develop some likes and
dislikes about the alternative brands. This attitude towards the brand influences intention
to buy. Thus the potential buyer moves towards final selection. In addition to all other
factors, situational factors like dealer terms, falling prices of the product etc. also are
considered before making the final purchase decision.
 Purchase intention may not be converted into purchase decision sometimes due to the
following two factors;
1. attitude of others
2. situational factors (not anticipated earlier)
For example, a person may have an intention to buy SONY TV, but the attitude of his co-
workers may be negative towards that brand and hence the person may decide not to buy
that brand. A person may not buy the costly brand if suddenly he loses his job (situational
factor). He may go for a cheaper brand in that case.

(5) POST PURCHASE BEHAVIOUR

 After purchasing the product the consumer will experience some level of satisfaction or
dissatisfaction. After purchasing a product, a consumer may find a fault in the product. The
behaviour after a product purchase is called Post purchase behaviour.
 Often, after a product purchase the buyer undergoes post purchase dissonance means the
buyer regrets his /her purchase. This dissonance can be due to: -

the

 The actions taken by dissatisfied customers are;

 Some consumers will no longer want that product, Some other may not worry about it and
they would not do anything about it and Some may even say the fault as increased value of
the product. E.g. an upside down page in the first edition of a famous author’s book might
make the book become a collection item worth many a price.
 Dissatisfied consumer respond differently. They may stop buying that faulty product again
or they may return the product or they may complaint.
 Now based on the satisfaction or dissatisfaction the consumer will re-buy the product or
discontinue the product.
 Consumers take any of following actions as their post-purchase behaviour;

Rent it
Get rid of it
Temporarily Lent it

Give it away
Trade it
Product Get rid of it Sell it
permanently Throw it

Keep it Convert it to serve original purpose

Convert it to serve new purpose
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Store it
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

FACTORS AFFECTING CONSUMER DECISION MAKING

PROCESS

A. CULTURAL FACTORS:
(1) Culture:
Cultural factors have an influence on buyer behaviour. Culture is a set of learned beliefs, values,
attitudes, morals, customs, habit, and forms of behaviour that are shared by the society. Culture
affects the decision making. For example: dressing habits, food habits are dependent on culture.

(2) Sub-Culture
Each culture consists of smaller sub-cultures that provide more specific identification and
socialization for its members. There are four types of sub-cultures.
 Nationality group such as Indian, Chinese, Italian etc.
 Religious groups such as Christians, Hindus, Muslims etc.
 Racial groups such as Blacks, Whites etc.
Geographical groups such as North Indian, South Indian etc.

(3) Social Class

Social classes are divisions of the society which are hierarchically ordered and whose members
share similar values, interests and behaviour. Mainly there are three social classes: Upper, Middle
and Lower classes. The behaviour and habits of buying is different for each of these classes. They
differ in their reading habits, clothing habits etc. Upper class consumers want products and brands
that show their social status. Middle class consumers shop carefully, read advertisements and
compares prices before they buy.

B. SOCIAL FACTORS:

(1) Reference Groups

 They are the social, economic or professional groups that have a direct or indirect
influence on the person’s attitudes or behaviours. Consumers accept information provided
by their reference groups regarding quality, performance, style etc.
 These groups influence the person’s attitude, lifestyle and behaviour.

(2) Family
It is the most influential group on any person’s attitudes. Personal values, attitudes and buying
habits have been shaped by family influences. The member of family play different role such as
influencer, decider, purchaser and user in the buying process of any product. A person’s behaviour
is also influenced by his/her spouse (husband /wife) and children.
Example: Husband dominant : Life insurance, automobiles, television
Wife dominant : Washing machine, carpets, kitchen-ware
(3) Roles And Status
Roles and status also influences the process of making buying decision. Roles are activities of the
person in a group. A woman plays the role of wife, mother, and sister in a family. She plays the
role of an employee in an organization. She might also play the role of a secretary in an
association. Each role carries a status. People will choose product that will communicate their
status to the society.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

C. PERSONAL FACTORS:
(1) Life Cycle
People buy different goods and services during their life time. The life cycle of a person begins
with child birth, shifts to dependant childhood, adolescence, teenage, adults, middle aged, old and
then ends with death. Under each stage people’s buying behaviour is different. Under the first
three stages, decisions are not made by the consumer. They are totally dependent on others. In
the remaining stages, buyers not only make their decisions but also influence other’s buying
decision.
(2) Occupation
A person’s behaviour depends upon his occupation. A company’s Managing Director will prefer
expensive suits, air travel etc. A worker would prefer economic dresses, rail or road travel etc. The
occupation of a person decides his ability to buy.

(3) Economic Circumstances

Occupation gives rise to the economic circumstances. A person may in his life desire to buy so
many things. All his need do not become wants. This is because of his purchasing power. People’s
economic circumstances means their income, saving, assets, borrowing power and attitude
towards spending and saving.
(4) Life Style
Life style may be defined as the way of living of a person. It is indicated through the person’s
activities, interest and opinions. A person may reside in a costly bungalow. He may have costly
furniture. He shall buy his clothing’s only from Raymond’s. He may stay only in a five-star hotel.
His hobby may be playing Billiards. With the above activities we can understand the life style of a
person. Hence a consumer will choose his products and brands according to his life style.

(5) Personality
Personality is defined as the person’s psychological traits (characteristics) that lead to relatively
consistent and enduring responses to his/her environment. Personality can be seen in terms of
such qualities as self-confidence, dominance, autonomy, sociability, defensive etc. A person will
decide his purchase according to his/her personality.

D. PSYCHOLOGICAL FACTORS:

(1) Motivation
Motivation is the drive to act, to move, to obtain a goal or an objective. A human being is
motivated by needs. When these needs are backed by purchasing power it becomes a want and
demand. Buyer behaviour is hence influenced by the level of his or her motivation.

(2) Perception
A motivated person acts according to his/her perception of the situation. To perceive is to see, to
hear, to touch, to taste, to smell and to sense something or event or relation and to organize,
interpret and find meaning according to the experience. Our senses perceive the colour, shape,
smell, taste etc. and act accordingly. Our buying behaviour is influenced by our perception.

(3) Learning
Learning describes changes in an individual’s behaviour arising from experience. Learning refers to
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changes in behaviour brought about by practice or experience. Consumer’s buying is highly

affected by his past learning.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

(4) Belief
A belief is a descriptive thought that a person holds about something. These beliefs may be based
on knowledge, opinion or faith. They may or may not carry emotional change. Consumer’s buying
is definitely affected by his or her belief regarding the product / brand.

(5) Attitude
An attitude describes a person’s favourable or unfavourable evaluations, emotional feelings, and
action tendencies toward some object or idea. Attitudes lead people to behave in a consistent
way towards similar objects. For example, once a consumer has developed a brand loyalty, it is
hard to change his attitudes and beliefs towards that brand.

COMPREHENSIVE MODELS OF CONSUMER DECISION

MAKING:

1. NICOSIA MODEL
 Nicosia Model of Consumer Behaviour was developed in 1966, by Professor Francesco M.
Nicosia, an expert in consumer motivation and behaviour.
 This model focuses on the relationship between the firm and its potential consumers.
 The model suggests that messages from the firm (advertisements) first influences the
predisposition of the consumer towards the product or 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 evaluation of the product
attributes by the consumer.
 If the above step satisfies the consumer, it may result in a positive decision to buy the
product otherwise the reverse may occur.
 Looking to the model we find that the firm and the consumer are connected with each
other. The firm tries to influence the consumer and the consumer is influencing the firm by
his decision.

The Nicosia model of Consumer Behaviour is divided into four major fields:
1. Field 1: The firm’s attributes and the consumer’s attributes.
The first field is divided into two sub-fields. The first sub-field deals with the firm’s marketing
environment and communication efforts that affect consumer attitudes, the competitive
environment, and characteristics of target market. The second sub-field specifies the
consumer characteristics e.g., experience, personality, and how he perceives the promotional
idea toward the product. In this stage the consumer forms his attitude toward the firm’s
product based on how he interprets the message.
2. Field 2: Search and evaluation. The consumer will start to search for other firm’s brand and
evaluate the brand in comparison with alternate brands. In this case the firm motivates the
consumer to purchase its brands.
3. Field 3: The act of the purchase. The result of motivation will arise by convincing the
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consumer to purchase the firm products from a specific retailer.

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4. Field 4: Feedback of sales results. This model analyses the feedback of both the firm and the
consumer after purchasing the product. The firm will benefit from its sales as a feedback, and
the consumer will use his experience for future decisions related to the firm’s products.

ADVANTAGES
 The model describes many steps which lie between attitude formation and actual
behaviour of the consumer. Such details help us to understand the problems that
researchers have when they find that attitudes do not always predict behaviour.
 The model is strong in showing change in consumer attributes due to the experience of
considering, choosing, purchasing, and using a product.
 There is intra-person feedback, i.e., consumers think of themselves and respond to their
thoughts and acts.

LIMITATIONS
 The model does not present problems when used to make predictions. The linkages shown
in the diagram indicate flows rather than causation.
 The model is not very clear in describing how and when the consumers’ or firms’ attributes
function.
 The Nicosia model of consumer behaviour does not provide detail explanation of the
internal factors which may affect the personality of the consumer,
 It does not give information about how the consumer develops his attitude towards the
product. For example, the consumer may find the firm’s message very interesting, but he
cannot buy the firm’s brand because it contains something which is against his beliefs.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

2. HOWARD-SHETH MODEL
INTRODUCTION
 Howard Sheth Model of consumer behaviour was introduced by John Howard and Jagadish
Sheth in Year 1969.
 It is the first model on consumer behaviour developed by utilizing the learning theory in a
systematic manner.
 This model evaluates how the integrated efforts of social, psychological and marketing
forces influences the preferences and buying behaviour of consumer into a logical
sequence of information processing.
 It shows how a consumer responds to the buying decisions over a period of time.
 The model tells how in case of incomplete information and reducing processing capability,
a consumer responds to the choice of products.
 This concept on consumer behaviour was published in book “The theory of Consumer
Behaviour”.

HOWARD SHETH MODEL LEVEL OF DECISION-MAKING

According to this model, following are three types of consumer decision making;

1. Extended Problem Solving:

 Extended problem solving is a purchase decision process in which customers spend more
time and effort to analyse alternatives.
 Customers engage in extended problem solving when the purchase decision involves a lot
of risk and uncertainty.
 There are many types of risks. Financial risks arise when customers purchase an expensive
product. Physical risks are important when customers feel a product may affect their
health or safety. Social risks arise when customers believe a product will affect how others
view them.
 Consumers engage in extended problem solving when they are making a buying decision to
satisfy an important need or when they have little knowledge about the product or service.
 Due to high risk and uncertainty in these situations, customers consult with friends, family
members, or experts. They may visit several retailers before making a purchase decision.

2. Limited Problem Solving:

 Limited problem solving is a purchase decision process involving a moderate amount of
effort and time.
 Customers engage in this type of buying process when they have had some past
experience with the product or service and their risk is moderate.
 In these situations, customers depend more on personal knowledge and less on external
information.
 They usually choose a retailer they have shopped at before and select goods/services they
have bought in the past.
 One common type of limited problem solving is impulse buying. Impulse buying is a buying
decision made by customers on the spot after seeing the merchandise.
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 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

3. Habitual / Routinised Decision-Making:

 Habitual decision making is a purchase decision process involving little or no conscious
effort.
 Today’s customers have less time available with them. One way they solve time pressures
is by simplifying their decision-making process.
 Habitual decision-making process is used when decisions are not very important to
customers and involve familiar products they have bought in the past.
 Brand loyalty and store loyalty are examples of habitual decision making.
 Customers are attracted to stores carrying popular brands. Store loyalty means that
customers like and habitually visit the same store to purchase products.

VARIABLES / ELEMENTS OF HOWARD SHETH MODEL

A. Input Variables
Input variables are information regarding the features of product like its quality, price,
uniqueness, service and availability. It can be further classified into three categories as: –
 Significant Stimuli: It is about physical attributes and features of a product. It comprises of
price of product, its quality, its uniqueness, type of service and accessibility in market.
 Symbolic Stimuli: It means the visual features of product that are shown by sales people.
Promotional messages and publicity done by seller develops a psychological impact on
consumer’s perception about features of product.
 Social Stimuli: Social stimuli include the social environment of consumers which provide
information about market and influence his/her buying decision. It consists of family,
reference groups and social class of buyer in general.

B. Hypothetical Constructs
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It includes all psychological variables that influence the buyer’s behaviour while making purchase
decisions. It can be further categorized into 2 categories: –
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i. Perceptual constructs: It describes the way in which buyer procure, process and perceive
information from input variables. It is a vital component as it influences the selection of
brand and finally the purchase by consumer. It includes: –
 Sensitivity to information-Buyer’s sensitivity and understanding level towards the
message received by him.
 Perceptual bias-Partialness of a buyer towards a specific brand on grounds of each
brand’s individual perception.
 Information search-Buyer for taking proper decisions looks out for attaining more
information.

ii. Learning Constructs: Following are the learning constructs for the buyer;
 Motive - Motive refers to the ultimate purpose for buying the product.
 Choice criteria - Buyer chooses a product or brand based on certain criteria.
 Brand Comprehension - Buyer’s present state of information regarding the brand
 Attitude-Attitude is the likes/dislikes of buyer to purchase the brand.
 Confidence- Confidence is the result of trust that buyer have in a particular brand.
 Intention- It is final selection of a specific brand
 Satisfaction – It is the result of buyer using the product and getting what he/she
expected.

C. Output Variables
It is the outcome/result of decision making process of buyer that can be seen through his
observable response towards input variables.
 Attention - Attention is the buyer’s state of alertness for understanding the information
 Brand Comprehension – It is buyer’s awareness towards the brand and its products.
 Attitude - It is the buyer interest, likes and dislikes towards the brand or products.
 Intention - Buyer intention is the main objective for buying a particular product.
 Purchase Behaviour - buyer finally buys the product

D. Exogenous Variables
They are the external environmental forces that are not directly involved in decision making
process of buyer but have a great impact on his buying decisions. These variables are listed below:
 Purchase Importance-It is the degree of importance and value of purchase as perceived by
buyer which influences his/her preference for brand.
 Personality Variables-These are the personal traits of buyer that influence his decisions
while buying a product such as ego, anxiety, self-esteem, authoritarian and dominance.
 Culture-Culture refers to values, ideas and beliefs of buyer that make up his/her motive of
purchase.
 Social class-It is the social group of individual comprising of his family, friend and reference
groups that affects the decisions for choosing a particular brand.
 Organization-Power, authority and status of individual are defined by their interaction
with various social groups. These formal and informal communications of buyer influence
his hypothetical constructs.
 Time Pressure-It refers to time period when product of a preferred brand is not available in
market and buyer is under high pressure to look for various alternatives available and take
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a timely decision.
 Financial Status-It refers to inability of an individual for purchasing a product which
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restricts him/her from buying it

Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

3. ENGEL-KOLLAT-BLACKWELL MODEL
INTRODUCTION
The Engel Kollat Blackwell Model of Consumer Behaviour was created to describe the increasing,
fast-growing body of knowledge regarding consumer behaviour. This model has gone through
many revisions over the years.

EKB Model
The Engel Kollat Blackwell Model of Consumer Behaviour consists of four stages;

1. Information Input Stage: At this stage the consumer gets information from marketing and
non-marketing sources, which influence the problem recognition stage of the decision-
making process. If the consumer still does not arrive to a specific decision, the search for
external information will be activated in order to arrive to a choice or in some cases if the
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consumer experience dissonance because the selected alternative is less satisfactory than
expected.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
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 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

2. Information Processing Stage: This stage consists of the consumer’s exposure, attention,
perception, acceptance, and retention of incoming information. The consumer must first
be exposed to the message, allocate space for this information, interpret the stimuli, and
retain the message by transferring the input to long-term memory.

3. Decision Process Stage: The central focus of the model is on five basic decision-process
stages: Problem recognition, search for alternatives, alternate evaluation (during which
beliefs may lead to the formation of attitudes, which in turn may result in a purchase
intention) purchase, and outcomes. But it is not necessary for every consumer to go
through all these stages; it depends on whether it is an extended or a routine problem-
solving behaviour.

4. Variables Influencing the Decision Process: This stage consists of individual and
environmental influences that affect all five stages of the decision process. Individual
characteristics include motives, values, lifestyle, and personality; the social influences are
culture, reference groups, and family. Situational influences, such as a consumer’s financial
condition, also influence the decision process.

Insight of Model:
 It can be seen that many of the elements of the model are similar to Howard Sheth model
of consumer behaviour, but the presentation and relationship between the variables
differs to some extent.
 The Engel Kollat Blackwell Model of Consumer Behaviour includes values, lifestyle,
personality and culture as factors that influence consumer’s decision making. The model
did not show what factors shape these items, and why different types of personality can
produce different decision-making? How will we apply these values to cope with different
personalities?

4. SHETH’S FAMILY DECISION MAKING MODEL

 In a family decision-making model, it is important to understand how the family members
interact with each other while making decision to buy.
 There are different consumption roles played by various members of the family. These
roles are as follows:

(i) Influencers:
 Influencers are the family members who influence the purchase of the product by
providing information to the family members.
 Example - The son in a family may inform the members of a new fast food outlet. He can
influence the family members to visit the outlet for food and entertainment.

(ii) Gate keepers:

 These members control the flow of information for a product or brand that they favour
and influence the family to buy the product of their choice.
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 They provide the information favourable to themselves and, withhold (hide) information
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about other product which they do not favour.

Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954
 MARKETING MANAGEMENT, S.Y. BBA (SEM 3), New Syllabus 2019-20, VNSGU-SURAT

(iii) Deciders:
 These are the people who have the power or, money and authority to buy.
 They play a major role in deciding which product to buy.

(iv) Buyers:
 Buyers are the people who actually buy.
 Example - A mother buying ration for the house etc.

(v) Preparers
 These are the people who prepare the product in the form it is actually consumed.
 Example - Mother preparing food by adding ingredients to the raw vegetable.

(vi) User
 The person who actually uses or consumes the product is called User.
 The product can be consumed individually or jointly by all members of the family.
 Example - Use of car by the family, use of refrigerator, TV, etc.
 The roles that the family members play are different from product to product. Some
products do not involve the influence of family members

 The diagram shows the predisposition of various family members, which when influenced
by other factors leads to joint or individual decisions.
 These factors are shown in the diagram and consist of social class, lifestyle, role
orientation, family life-cycle stage, perceived risk, product importance and time pressure.
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Dr. ZAKIR PATEL, PROF. NARAN LALA COLLEGE OF COMM & MNGT, NAVSARI
MOB: 9586075954