Purchasing Behaviour – Consumer Modeling

Modeling Things to learn in this chapter: • Engel, Blackwell and Miniard model. • J. N. Sheth model of industrial behaviour. • Nicosia model. Engel, Blackwell and Miniard model The core of the EBM model is a decision process, which is augmented with inputs from information processing and other influencing factors. The model has four distinctive sections, namely Input, Information Processing, Decision Process and Variables influencing decision process. Information Input Information from marketing and non-marketing sources are fed into the information processing section of the model.

The model also suggests additional information to be collected is available from memory or when post-purchase dissonance occurs. Information Processing Before information can be used in the rest of the model, the consumer will first be exposed to the information processing. That is, the consumer must get exposed to the information, attend to it, comprehend and understand it, accept it and finally maintain it in the memory. Any selective attention or exposure mechanisms that may occur in post purchase dissonance would operate at this stage. Decision Process

Need Recognition: This acknowledges the fact that there exists a problem. That is, the individual is aware that there exists a need to be satisfied. Search: When enough information is available in memory to take a decision, then only internal search will be required. If internal information is limited, an external search for information is undertaken. Alternative Evaluation: An evaluation of the alternatives found during the search is undertaken. It is observed from the model that the attitudes and beliefs are taken into account during this process.

Purchase: A purchase is made on the chosen alternative. Outcomes: The outcome can be either positive or negative depending on whether the purchase satisfies the original perceived need. Dissatisfaction can lead to post-purchase dissonance. Variables Influencing Decision Process This section considers the individual, social, and situational factors that influence the decision processes. The EBM model is very flexible and more coherent model of consumer behaviour. It also includes human processes like memory, information processing and considers both the positive and negative purchase outcomes.

However the model has been criticized on two aspects. Firstly, on the somewhat vague definition of the role of the influencing variables and secondly, it is felt that the separation of information search and alternative evaluation is somewhat artificial. Engel, Blackwell and Miniard (EBM) Model: . The Sheth Model of Organizational Buying This model concentrates on the purchasing process and highlights the importance of four main factors: 1. The expectations of the individuals making up the Decision Making Unit (DMU). These elements are represented by the block in the diagram below arked as (1). According to this model, every person in the DMU brings with them, their own unique set of attitudes and orientations. The individual background like education, role orientation, and life style will condition their expectations. The following will also influence their expectations: • The various sources of information like sales people, exhibitions and trade shows, direct mail, press releases etc. • Perceptual distortion (1d in block diagram). • The person’s previous experience (1e in block diagram). • The active search (1c in block diagram). 2.

The characteristics of both the product and the organization. The model refers to the actual buying process and contends that it is affected by the following: • The product specific factors (2a) like: o Time pressure: Group decision will take a longer time as compared to individual ones. o Perceived risk: More the risk, more the members involved in DMU. o Type of purchase: When the type of problem is an extensive problem, more members will be involved in the DMU. • Company specific problems (2b) which include the following: o Organizational orientation. o Organization size. Degree of centralization. Sheth J. N Model: 3. 3. The nature of the decision making process. The model differentiates between autonomous decisions and joint decisions. It also considers the following: • Problem solving. • Persuasion. • Bargaining. • Politicking. 4. The situation variables. These variables are coded (4) in the model. Here the model refers to unforeseen factors, those which fall outside the control of the DMU and could affect the purchasing organization or supplies and can include, for example, labour problems, major breakdowns, cash flow problems, bankruptcy etc. The Nicosia Model.

In the recent years marketing scholars have built buyer behaviour models taking into consideration the marketing man’s view point. The Nicosia model is one such model. It is also said to be a system model, because the human being is analyzed as a system, with stimuli as the input to the system and the human behaviour as the output. This model developed by Francesco Nicosia, tries to explain buyer behaviour by establishing a link between the organization and its prospective consumer. The model suggests that messages from the organization first influence 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. ATTITUDEField 4 The MOTIVATIONfeed backField 3 The purchasing action The Nicosia model, groups the activities into four basic areas that are as under: Field 1 has two-sub areas- the consumer’s attributes and the organization’s attributes.

The advertising message sent from the company will reach the consumer’s attributes. Depending on the way the message is received by the consumer, a certain attribute may develop. This newly developed attribute becomes the input for area two. The second area or area two- is related to the search and evaluation, undertaken by the consumer, of the advertised product and also to verify if other alternatives are available. In case this step results in a motivation to buy the product or service, it becomes the input to the third area. The third area explains how the consumer actually buys the product.

The area four is related to the uses of the purchased items. This fourth area may also be used as an input to receive feedback on sales results to the organization. ———————– Stimuli Marketer Dominated other Exposure Attention Comprehension Acceptance Retention Memory Internal Search Search Need Recognition Alternative Evaluation Purchase Out comes Dissatisfaction Satisfaction Beliefs Attitude Intention Environmental influences • Culture • Social class • Personal influence • Family • Situation Individual Differences • Consumer resources Motivation & involvement • Knowledge • Attitudes • Personality • Life styles • Demographics Input Information Processing External Search Decision Process Variables influencing decision process (4) Situational factors Life style Role Orientation Specialized education Salesperson (1e) Satisfaction with purchase (1a) Background of individual (1) Active Search Exhibitions Supplier or Brand choice (3) Conflict resolution 1. Problem solving 2. Persuasion 3. Bargaining 4. Politicking 5. Organization orientation Types of purchase Perceived Risk Time pressure

Organization size Degree of centralization (2b) Company specific factors (2a) Product specific factors Joint decisions Autonomous decisions (2) Industrial buying process (1d) Perceptual Distortion (1) Expectations of: 1. Purchase agents 2. Engineers 3. Users 4. Others Others Word of mouth Trade news Professional and technical conferences Journal advertising Press releases Direct Mail MESSAGE EXPOSURE Sub Field 1 Firm’s Attributes Sub Field 2 Consumer Attributes Experience Search Evaluation Decision (action) Purchasing Behaviour Consumption Storage Field 2

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