CONSUMER BEHAVIOURS MODELS:
Industrial and Individual Consumer Behavior Models
Understanding buyer behaviors plays an important part in marketing. Considerable
research on buyer behavior both at conceptual level and empirical level has been
accumulated. There are two types of buyers −
Industrial (organizational) buyer
Individual consumer
Organizational buying behavior has many distinctive features −
First, it occurs in a formal organization which is caused by budget and cost.
Second, in some conditions, joint decision-making process may occur, and
this is not possible in individual buying behavior.
Finally, conflict occurs and they are hard to avoid in the joint decision making
process.
In order to understand the organizational buying behavior, we first consider who will
be involved in the buying process and what are their expectations. At least,
purchasing agents, engineers, and final consumers will participate in the buying
process.
The potential of different decision maker are different in different situations. In this
model, there are five different sets of variables determining the expectations of the
individual −
The individuals' background, information sources, vigorous search, the selective
bend of the information based on their previous information and expectations,
satisfaction with previous purchase.
Except the perceptual distortion, the other four variables that are easy to gather
information.
The second part of the model is regarding the industrial buying processes −
Independent decision which means that the decision is delegated to one
department, joint decision processes.
The product-specific factors (the perceived risk, the type of purchase, and time
pressure) and the company-specific factors (company orientation, company size,
and degree of centralization) will determine the type of factor.
The greater the apparent risk, the more preferred to joint decisions. If it is a life-time
capital buy, the more likely the joint decision will take place.
If the decision has to be made at an emergency, it is likely to entrust to one party. A
small and privately-owned company with product or technology orientation will lean
towards independent decisions.
While a large public company with decentralization will tend to have joint decision
process.
Economic Man Model
In this model, consumers follow the principle of maximum utility based on the law of
diminishing marginal utility. Economic man model is based on the following effects −
Price Effect − Lower the price of the product more will be the quantity
purchase.
Substitution Effect − Lower the price of the substitute product, lower will be
the utility of the original product purchase.
Income Effect − When more income is earned, or more money is available,
quantity purchased will be more. The economic theory of buyer’s decision-
making was based on the following assumptions −
As consumer resources are limited, he would allocate the available money which
will maximize the satisfaction of his needs & wants.
Consumers have complete knowledge about the utility of each product and service,
i.e., they are capable of completing the accurate satisfaction that each item is likely
to produce.
As more units of the same item are purchase the marginal utility or satisfaction
provided by the next unit of the item will keep on decreasing, according to the law of
diminishing marginal utility.
Price is used as a measure of sacrifice in obtaining the goods or services. The
overall objective of the buyer is to maximize his satisfaction out of the act of
purchase.
Learning Model
This model suggests that human behavior is based on some core concepts − the
drives, stimuli, cues, responses and reinforcements which determine the human
needs and wants and needs satisfying behavior.
Drive − A strong internal stimulus which compels action.
Stimuli − These are inputs which are capable of arousing drives or motives.
Cues − It is a sign or signal which acts as a stimulus to a particular drive.
Response − The way or mode in which an individual reacts to the stimuli.
If the response to a given stimulus is “rewarding”, it reinforces the possibility of
similar response when faced with the same stimulus or cues. Applied to marketing if
an informational cue like advertising, the buyer purchases a product (response); the
favourable experience with the product increases the probability that the response
would be repeated the next time the need stimulus arises (reinforcement).
The Psychoanalytic Model − The model suggests that human needs operate at
various levels of consciousness. His motivation which is in these different levels, are
not clear to the casual observer. They can only be analyzed by vital and specialized
searching.
Sociological Model − This is concerned with the society. A consumer is an
element of the society and he may be a member of many groups and institutions in
a society. His buying behavior is influenced by these groups. Primary groups of
family friend’s relatives and close associates extract a lot of influence on his buying.
A consumer may be a member of a political party where his dress norms are
different from different member. As a member of an elite organization, his dress
needs may be different, thus he has to buy things that confirm to his lifestyle in
different groups.
