Consumer decision making models

Sociological Models

Nicosia Model of consumer behaviour

Proposed by Francesco M. Nicosia in the 1970s The model concentrates on the communication process that occurs between a brand and a consumer

Explain the complex decision process that consumers engage in during purchase of new products
Dynamics involved in decision making Decision aiming was presented as a series of decisions

 Model describes a circular flow of influences. Each component provides input to the next.

 Four components of model

Firms attributes, communications and consumers pyschological attributes. Consumers search for evaluation of alternatives Consumers motivated act of purchase Consumer storage or use of the product

1.Marketer's communication affecting consumers attitude TV, newspaper, websites, personally

2. Consumer's search and evaluation: Motivation

3. Purchase action
4. Consumption experience and feedback : Memory

Howard-Sheth Model of Buying behaviour

Given by John Howard and Jagdish Sheth in 1969. Tried to explain buyer rationality while making purchase decisions even in conditions of incomplete information Differentiated between three levels of decision making, EPS, LPS and RPS

The model has four major components

Stimulus inputs (input variables)

Hypothetical constructs Response outputs (output variables)

Exogenous variables

Stimulus inputs (Input variables)

Informative cues about the product/service offering
Information cues could relate to quality, price, distinctiveness, service and availability The informational cues could be Significative, Symbolic, and Social.

Engel-Blackwell-Miniard Model
Developed originally in 1968 by Engel, Kollat, and Blackwell. Later on Miniard contributed few attributes in it.

 Five activities of decision process occuring over a time period:

Motivation and need recognition Search for information Alternative evaluation Purchase outcomes

 Model variables grouped into four general categories:

Stimulus inputs Information processing Decision process Variables influencing the decision process

 Arrows in the model depicts major directions of influence. Authors recognized two significantly different modes of operation by consumers.
Extended problem solving behaviour (EPS) Low problem solving behaviour

 Information search
Individual characteristics (Risk taking ability) Environmental influences (urgency of need)

 Acceptance or info processing

Acceptance (Comparison to evaluative criteria and existing beliefs) Retention Evaluation of criteria result in : Beliefs Attitudes Intentions

Need Recognition

Environmental Influences: Culture Social class Personal influences Family situation

Internal Search Exposure

Search Pre purchase evaluation Purchase

Stimuli
Marketing Dominated
NonMarketing Dominated

Attention

Comprehension

Memory
Consumption

Individual influences: Consumer resources Motivation Knowledge Attitudes Personality Lifestyle demographi cs

Acceptance

Retention

Post Consumption evaluation

External Search Dissatisfaction

Divestment Satisfaction

Bettman's Information Processing Model of Consumer Choice (1979) Introduces in 1979 Consumer is central to a host of information processing activities. Receives a large amount of information externally from the marketer, competitors and the environment. Has a large store of information within him as a database that he builds over time from his learning, experiences, social influences

 With a huge amount of information that he is exposed to, the processing becomes difficult and unmanageable. But consumers possess a limited capacity for processing information. So consumers use certain simplifying strategies to process information Use simple decision rules for specific situations

 The consumer information process is depicted through several flowcharts. Which depict the various components of the model and the interrelationships between them

 main components of the model are:

Processing capacity Motivation Attention Information Acquisition Evaluation Decision process Consumption learning processes

Stage No. 1: Processing capacity

Consumer has limited capacity for processing information. Consumers are not interested in complex computations and extensive information processing. Consumers are likely to select choice strategies that make product selection an easy process.

 Try to bypass their limits by being selective towards information receptivity

ignoring certain information that they consider irrelevant or in comprehendible prioritizing information that is required and is in use

Stage No. 2: Motivation

Motivation is located in the center of Bettman model. Influence both the direction and the intensity of consumer choice for more information while deciding.
There exists a hierarchy of goals mechanism that provides different subgoals to simplify the choice selection

 Consumers own experience in a specific area of market and he doesnt need to go through the same hierarchy every time to arrive at a decision. Converts the non-action or passive inputs in the consumers into action outputs or active behavior. No concern was given on religious motives.

Stage No. 3: Attention and perceptual encoding

Voluntary attention- conscious allocation of
processing capacity to current goals or When a consumer actively/consciously seeks attention to achieve his goals.

Involuntary attention- automatic response to

disruptive events (e.g., newly acquired complex information) Short term attention that he provides before deciding whether he should process the information that he has been exposed to.

 The perceptual encoding accounts for the different steps that the consumer needs to perceive the stimuli and whether he needs more information.
Person integrates the information that he has processes into his already existing perceptual network or database

 Based on perceptual encoding and the database, the consumer decides on the need and the quantum of marketing information that he needs to process. This leads to the scanner and interrupt mechanisms and the resultant responses. The scanner and interrupt mechanisms act like on and off switches for a consumer.

Stage No. 4: Information acquisition and evaluation

Insufficient Information in database: Searching, Attention, Reception. Sufficient Information: Information process gets interrupted. Newly acquired information is evaluated and its suitability or usefulness is assessed

 After acquiring information, the consumer evaluates the information for utility and sufficiency, and then moves on to make decision choices. Cost-benefit analysis of information with time, efforts and money.

Stage No. 5: Memory

In this component the consumer keeps all the information he collects. It will be the first place to search when he need to make a choice. Insufficient information in memory will lead to external search.

Stage No. 6: Decision Process

This component deals with the application of heuristics or rules of thumb, which are applied in the selection and evaluation of specific brand. Heuristics- Influenced by both individual factors (e.g., personality differences) and situational factors (e.g., urgency of the decision).

 Thus it is unlikely that the same decision by the same consumer will apply in different situation or other consumer in the same situation. If the purchase is a routine purchase, the decision making is faster and often repeat; in other cases, it may take time.

Stage No. 7: Consumption and Learning Process

Future results after the purchase. Consumer gained experience. Experience provides information.

Information becomes memory.

Affects future behaviour.

An Assessment of the Model

Focuses only on information processing. No explanation was given about the criteria by which the consumer accepts or refuses to process some specific information.

Concept

Basic Idea

Insight

Information Processing capacity

Consumers limitations in the Choose the most important amount of information they and useful points to can acquire, use & communicate. remember.
Processing, acquiring & evaluating information are affected by motivation, attention & perception Provide that amount of info which takes little effort to obtain, draws consumers attention & is unambiguous, simple & clear.

Information search

Decision rules/Heuristics

Rules of thumb, developed to enable consumers to select among preferred alternatives.

Internal feedback based on outcome of choices which are used in future decisions.

Learn to synthesize information, that has meaning and purpose to your target market.
Keep in mind that the consumers have probably made related choices in the past, & are not empty vessels Design info tailored to the audience; place it conveniently for use.

Consumption and learning

Information environment

Amount, location, format, readability & processability of relevant info

THE SHETH-NEWMANGROSS MODEL

 Proposed in 1991. Tries to explain Why consumers make choices as they do. Highlights a series of specific measurements to understand the underlying consumer decision.

 SNG model is based on the basic premise that Consumer choice is a function of certain specific consumption values.
Functional value Social value Emotional value Epistemic value Conditional value

Functional value
"The perceived utility acquired from an alternative for functional, utilitarian, or physical performance. An alternative acquires functional value through the possession of salient functional, utilitarian, or physical attributes. Functional value is measured on a profile of choice attributes.
decision to purchase a particular automobile may be based on fuel economy and maintenance record

Social value
"The perceived utility acquired from an alternative association with one or more specific social groups. An alternative acquires social value through association with positively or negatively stereotyped demographic, socioeconomic, and culturalethnic groups. Social value is measured on a profile choice imagery."
a particular make of automobile is being chosen more for the social image

Emotional value
"The perceived utility acquired from an alternatives capacity to arouse feelings or affective states. An alternative acquires emotional value when associated with specific feelings or when precipitating those feelings. Emotional values are measured on a profile of feelings associated with the alternative."
interest, joy, surprise, sadness, anger, disgust, contempt, fear, shame, and guilt

Epistemic value
"The perceived utility acquired from an alternatives capacity to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge. An alternative acquires epistemic value by items referring to curiosity, novelty, and knowledge."
Trying something NEW

Conditional value
"The perceived utility acquired by an alternative is the result of the specific situation or set of circumstances facing the choice maker. An alternative acquires conditional value in the presence of antecedent physical or social contingencies that enhance its functional or social value. Conditional value is measured on a profile of choice contingencies."

 some products only have seasonal value (e.g., greeting cards) some are associated with once in a life events (e.g., wedding dress) and some are used only in emergencies (e.g., hospital services)