Consumer behaviour models

A model a is simplified version of reality, it has never been reality, it isnt reality and it will never be reality... are subject to criticism oh and if we are a bit postmodern, we could ask, what is reality therefore all models

Objectives
At the end of this session, you should be able to Understand the concept of modelling within consumer behavior studies; Evaluate the applicability of traditional models of consumer behaviour; Evaluate the applicability of contemporary models of consumer behaviour. Understand the main components of the assignment

The models hall of fame

Maslows Hierarchy of Needs; Hierarchy of Effects Elaboration Likelihood model Howard-Shethmodel Engel, Kollat and Blackwell model Nicosia Model

 Decision-making models Problem identification models Fishbein and Ajzens Behavioural Intention model Fritz Heider Balance Theory E.Rogers adoption and diffusion of innovations Image congruency theory Information processing

Models and theory

Theory: an interrelated set of concepts, definitions and positions that presents a systematic view of phenomenon (Loudon and Della Bitta,

Theory has 4 functions, to

DESCRIBE

EXPLAIN

PREDEICT

CONTROL

Are all these functions realistic

Types of models Algebraic models:Fishbeins Attitude Model

Ao= =biei
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 Conceptual models: Hierarchy of needs, (Maslow)

Types of models

Personal variable models: a take on Ajzens Theory of Planned Behaviour

Types of models Comprehensive Models: Howard-Sheth Model

Types of models Black Box Models

Consumer behaviour models: A brief history

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 consumer behaviour

Focus: Aggregate flows in the economy Microeconomics

Macroeconomics Focus: The act of purchasing

Microeconomics(from Loudon and Della Bitta, 1993)

Concentrates on the act of purchasing Interested in knowing what consumers were purchasing, ignoring the why and how underpinning their behaviour Assumptions made 1. Consumers wants and needs are unlimited and unquenchable 2. Consumers allocate their resources to maximise levels of satisfaction (MU1/P1 =MU2/P2 = MUn/Pn) 3. Consumers have perfect knowledge

4. The additional satisfaction of a unit that is bought after the first purchase will be less than the first purchases marginal satisfaction 5. Price is key 6. Consumers rational Macroeconomics(from Loudon and Della (from Loudon and DellaBitta Bitta, 1993) , Looks at the overall economy; the value of goods; fromthese conclusions are drawn about consumers behavior influencing these flows Relative income hypothesis: how much is spent it not solely determined by income but is influenced by peers Permanent income hypotheses: consumers determine how much to spend based on a perceived average of what can be consumed and not only on income Consumers behaviour is not taken into account

Behavioural economics(from Loudon and Della (from Loudon and DellaBitta 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 Katona Model

Actual economic condition

Psychological process

Consumer sentiment

Economic behaviour