1. Consumer BehaviourConsumer behaviour modelsJanice Denegri KnottRoom: W435Lecture 2 Email: jdknott@bournemouth.ac.uk

2. A model a is simplifiedversion of reality, it hasnever been reality, it isnt reality and it willnever be reality... 3. therefore all modelsare subject to criticism(oh and if we are a bit postmodern, we could ask, what is reality) 4. ObjectivesAt the end of this session, you should be able to:Understand the concept of modelling within consumer behaviourstudies;Evaluate the applicability of traditional models of consumer behaviour;Evaluate the applicability of contemporary models of consumerbehaviour.Understand the main components of the assignment 5. 1. The models hall of fame Maslows Hierarchy of Needs; Hierarchy of Effects Elaboration Likelihood model Howard-Sheth model 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 6. 2. Models and theory Theory: an interrelated set of concepts, definitions and positions that presents a systematic view of phenomenon (Loudon and Della Bitta, 1993) Theory has 4 functions, to: 1. Describe2. Explain3. Predict 4. Control Are all these functions realistic? 7. 3. Types of modelsAlgebraic models:Fishbeins Attitude Model nAo= =biei i=1Ao = the persons overall attitude towards the objectbi= the strength of his belief that the object is relatedto attribute I (e.g. ASDA is good value for money)ei= his evaluation or intensity of feelings (liking ordisliking) toward attribute in= the number of relevant beliefs for that person 8. 3. Types of models Conceptual models: Hierarchy of needs, (Maslow) 9. 3. Types of models Personal variable models: a take on Ajzens Theory of Planned Behaviour (1991) 10. 3. Types of models Comprehensive Models: Howard-Sheth Model 11. 3. Types of models Black Box Models 12. 4. Consumer behaviour models: A brief history4.1. Traditional Models of consumersEarly models derive from economics and were interested instudying how scarce resources are allocated to quenchand unlimited amount of wants and needs (Loudon andDella Bitta, 1993) Macroeconomics Microeconomics 13. 4. Traditional models of consumer behaviourFocus: Aggregate flows in the economy icsomonec Focus: The act of purchasingro ac1. MicroeconomicsM 14. 4.1. 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: Consumers wants and needs are unlimited and unquenchable Consumers allocate their resources to maximise levels of satisfaction (MU1/P1 =MU2/P2 = MUn/Pn) Consumers have perfect knowledge The additional satisfaction of a unit that is bought after the first purchase will be less than the first purchases marginal satisfaction Price is keyWhat are the limitations of this approach? Consumers rational 15. 4.2. Macroeconomics (from Loudon and Della Bitta, 1993) Looks at the overall economy; the value of goods; fromthese conclusions are drawn about consumers behaviourinfluencing these flows Relative income hypothesis: how much is spent it not solelydetermined by income but is influenced by peers Permanent income hypotheses: consumers determine howmuch to spend based on a perceived average of what canbe consumed and not only on income Consumers behaviour is not taken into accountWhat are the limitations of this approach? 16. 4.2.1. Behavioural economics (from Loudon and Della Bitta, 1993) George Katona introduces the need to look at psychologicalinfluences guiding consumers behaviour: behavioural economics Consumers will purchase products when they have confidence inthe economy (consumer sentiment)The Katona Model (source: Loudon and Bella Ditta, 1993) ActualPsychological ConsumerEconomiceconomicprocess sentiment behaviourconditionsCould this model help an organisation inany of its activities? 17. 4.3. Limitations Is this you? Do you know anybody who thinks like this? 18. 5. Contemporary Models 5.1. Nicosia Model 5.2. Howard-Sheth 5.3. Engel-Blackwell-ModelKollat 19. 5.1. Nicosia Model (1966)Field Two: Search for andField One: From the source of a message evaluation of means-end(s)to the consumers attitude relation(s) (Pre-Action Field) Sub-field two:Sub-field two: Sub-field one:Sub-field one: MESSAGEConsumersFirms attributesConsumers Firms attributes EXPOSUREattributes ATTITUDE attributes (pre-dispositions)(pre-dispositions)Search SearchEvaluation EvaluationEXPERIENCE MOTIVATION FEEDBACKConsumption ConsumptionField Four: DecisionDecisionThe feedbackPURCHASINGBEHAVIOURField Three: The act of purchaseCould this model help an organisation inany of its activities? 20. 5.1.1. Limitations Incomplete in a number of aspects, very reductionist Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance: What type of consumer are we talking about? The company and the consumer have an existing relationship? Whattype? Is this for a new product? Is this the first exchange the consumer hashad with the producer? The model cannot be validated, according to Foxall (1980) it is pre- scientific Do you agree with these? Can you t think of any other limitations? 21. 5.2. Howard-Sheth Model (1969)ExogenousPerceptualVariablesConstructsOutcome1Learning ConstructsCould this model help an organisation inany of its activities? 22. 5.2.1. Limitations Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined (Rau and Samiee, 1981) A number of assumptions have been made that question the validity of this model, for instance: Sharp distinctions between exogenous and other variables have notbeen made The model cannot be generalised, it cannot be applied to co-jointdecision making for example Can this model be applied for non-branded products (Rau andSamiee, 1981)? The model cannot be validated, according to Foxall (1980) it is pre- scientificDo you agree with these? Can you t think of any other limitations? 23. 5.3. Engel, Blackwell and Miniard (1990) Could this model help an organisation in any of its activities? 24. 5.3.1. Limitations Too many variables, a complex model that can be difficult to read Variables in the model have not been clearly defined (Rau and Samiee, 1981) The model is vague (Loudon and Della Bitta, 1993) Key variables are vaguely defined How do environmental variables affect consumers behaviour? How do motives influence consumers behaviour? It is a mechanical overview of human behaviour Can this model be applied for non-branded products? Goods?Services? (Rau and Samiee, 1981) The model cannot be validated, according to Foxall (1980) it is pre- scientificDo you agree with these? Can you t thinkof any other limitations? 25. 6. Conclusions A model presents phenomena in such a way that it can be easily communicated Models are just representative of reality, they are not reality There are different types of models (black box, conceptual, algebraic, personal variable and comprehensive models) The Nicosia, Howard-Sheth and the Engel, Kollat and Blackwell model have all been criticised on the grounds that they are pre-scientific 26. 6. Conclusions Models operate on the assumption that all human behaviour is rational All models are mechanistic No model provides genuine insight of what underpins consumer behaviour, is this possible? 27. Assessment The proposal (200 words worth 10% of yourfinal grade) SUBMISSION DATE: MONDAY, 20TH NOVEMBER A report (2070-2530 words worth 40% of yourfinal grade) SUBMISSION DATE: MONDAY, 15TH JANUARY End of year examination, worth 50% of yourfinal grade 28. Assignments main components Select a company or not-for-profitorganisation that you are familiarwith; Evaluate how a specific consumerbehaviour theory or model can aidin understanding consumersbehaviour and guidemarketing/advertising practice. 29. Assignment guidelines Consider the options offered in page10 of your unit guide; Go over guidelines offered and the assessment criteria Read lecture notes and accompanyingreading in order to select theory ormodel; Select an organisation that wouldbenefit from your analysis Conduct an environmental scanning to construct a justification for why there would be a need for your evaluation