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    Models of Consumer Behaviour

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    Himanshu Dargan
    The economic model of consumer behavior assumes that consumers are rational and aim to maximize their utility when making purchase decisions with limited resources. It also assumes consumers will allocate spending across products to maximize satisfaction based on diminishing marginal utility. However, behavioral scientists argue this model is incomplete as it ignores important psychological and social factors that influence consumer behavior.

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    Models of Consumer Behaviour

    Uploaded by

    Himanshu Dargan
    145 views7 pages
    The economic model of consumer behavior assumes that consumers are rational and aim to maximize their utility when making purchase decisions with limited resources. It also assumes consumers will allocate spending across products to maximize satisfaction based on diminishing marginal utility. However, behavioral scientists argue this model is incomplete as it ignores important psychological and social factors that influence consumer behavior.

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    MODELS OF CONSUMER BEHAVIOUR

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    The economic model of consumer behavior assumes that consumers are rational and aim to maximize their utility when making purchase decisions with limited resources. It also assumes consumers will allocate spending across products to maximize satisfaction based on diminishing marginal utility. However, behavioral scientists argue this model is incomplete as it ignores important psychological and social factors that influence consumer behavior.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    145 views7 pages

    Models of Consumer Behaviour

    Uploaded by

    Himanshu Dargan
    The economic model of consumer behavior assumes that consumers are rational and aim to maximize their utility when making purchase decisions with limited resources. It also assumes consumers will allocate spending across products to maximize satisfaction based on diminishing marginal utility. However, behavioral scientists argue this model is incomplete as it ignores important psychological and social factors that influence consumer behavior.

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    ECONOMIC MODEL OF CONSUMER BEHAVIOUR

    • Economic Model: Under economics, it is assumed that man is a


    rational human 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


    needs and tastes, a consumer will allocate his/her expenditure
    over different products at given prices so as to maximise utility.
    • The law of Equi marginal utility enables him to secure maximum utility from

    limited purchasing power. Economic model of consumer behaviour is uni

    dimensional. This means that buying decisions of a person are governed by the

    concept of utility. Being a rational man he will make his purchase decisions with

    the intention of maximizing the utility/benefits. Economic model is based on

    certain predictions of buying behaviour.

    1. Price effect – Lesser the price of the product, more will be the quantity

    purchased.

    2. Substitution effect – Lesser the price of the substitute product, lesser will be

    the quantity of the original product bought.

    3. Income effect – More the purchasing power, more will be the quantity

    purchased
    • Behavioral scientists feel the economic model is incomplete. They feel

    that the market to be homogeneous where all the buyers will think

    and act alike and also focuses only on one aspect of the product i.e.,

    income. It is a complex entity and hence the need to adopt a

    multidisciplinry approach to understand consumer behaviour.

    • Whereas, the model has ignored all vital aspects such as perception,

    motivation, learning, attitude, personality and socio-cultural

    factors. Economics role played by needs, motives, personality, & the

    socio-cultural factors have to be considered for understanding the

    buyer responses to various stimuli, which in turn could influence their

    buying behaviour.
    Nicosia Model of Consumer Behavior

    • Nicosia Model of Consumer Behavior  was developed in 1966, by Professor Francesco

    M. Nicosia, an expert in consumer motivation and behavior.  

    • 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 response,

    with a decision to buy the product otherwise the reverse may occur.  

    • Looking to the model we will 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.
    FIELD 1

    SUBFIELD 2
    SUBFIELD 1
    CONSUMERS
    FIRMS MESSAGE ATTITUDE
    ATTRIBUTE
    ATTRIBUTE

    FIELD 2
    SEARCH AND
    EVALUATION
    FEEDBACK

    EXPERIENCE
    FIELD 4

    MOTIVATION
    CONSUMPTION

    FIELD 3
    PURCHASING ACT OF PURCHASE
    BEHAVIOUR DECISION
    (ACTION)
    • Field 1: The firm’s attributes and the consumer’s attributes. The first

    field is divided into two subfields. The first subfield deals with the firm’s

    marketing environment and communication efforts that affect consumer

    attitudes, the competitive environment, and characteristics of target market.

    Subfield two 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 his interpretation of the message.

    • Field 2: Search and evaluation. The consumer will start to search for other

    firm’s brand and evaluate the firm’s brand in comparison with alternate

    brands. In this case the firm motivates the consumer to purchase its brands.
    • Field 3: Act of purchase. The result of motivation will arise by convincing

    the consumer to purchase the firm products from a specific retailer.

    • Field 4: Feed back This model analyses the feedback of both the firm and

    the consumer after purchasing the product. The firm will benefit from its

    sales data as a feedback, & the consumer will use his experience with the

    product affects the individuals attitude concerning future messages from the

    firm.

    • Limitations. Firstly, The flow is not complete and does not mention the

    various factors internal to the consumer. Secondly, The consumer being

    involved in the decision process with no predispositions about the various

    brands. Thirdly, The firm’s attributes and consumer attributes mentioned in

    the model seem to be overlapping.

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