The following text explains the importance of consumer behavior models for businesses. These models help businesses to understand the factors that influence customer purchasing decisions, so that they can more effectively target potential customers.
The different types of consumer behavior models are: live-in consumers, last-in consumers, and non-live-in consumers. The description of industrial buyer behavior is as follows: they are rational, consistent, and price-sensitive. You can further assess and address which part in your marketing scheme you must improve by using these models.
Traditional Behavior Models
1. Learning Model of Consumer Behavior
Customer behavior is motivated by two types of needs: those that are necessary for survival, like food, and those that are learned from lived experiences, like fear or guilt.
The lowesst level of this hiearchy is for basic needs, and the higer levels are for learned needs or secondary desires that make people feel like they have reached a goal.
The Learning Model suggests that people first buy what they need in order to survive, and then move on to purchasing items they want. For example, someone who is hungry will purchase food before they buy clothes.
2. Psychoanalytical Model of Consumer Behavior
Sigmund Freud is the father of psychoanalysis, which posits that human behavior is driven in part by unconscious desires.
There are various reasons why people might want to act in a certain way, even if they are not aware of it themselves. These can include things like hidden fears, suppressed desires, or personal longings.
Many customers make purchases based off of how well your company’s advertisements match up with their desires. For example, if you have a post on Instagram that catches their eye, they may be more likely to buy what you’re selling.
It is essential to understand that, since these yearnings can be out of someone’s awareness, clients are not always conscious of why it speaks to them; they are only aware that it feels right for them to have it.
This model is most relevant to businesses that sell an image along with their products or services. For example, a business that sells glasses.
3. Sociological Model
The Sociological Model of consumer behavior states that an individual’s place within different societal groups, such as family, friends, and workgroups, as well as less-defined groups like Millennials or people who like yoga, influences their purchases.
An individual will typically purchase items that are appropriate for the groups they are in.
For example, people in C-suite executive positions are usually expected to act professional and formal. This means that the types of purchases they make, such as clothing for work, should reflect and support the image that this group of people projects.
The Sociological Model can be applied to many businesses, particularly those that offer products and services aimed at specific target groups. To make use of the Sociological Model, experiences should be designed that reflect the typical behavior of these groups. An example would be brands that sell exercise equipment.
4. Economic Model of Consumer Behavior
The model focuses on what consumers are trying to achieve, not on how they go about achieving it. The economic model of consumer behavior operates under the assumption that consumers will attempt to minimize their spending in order to satisfy their needs. This model is focused on what the consumer is trying to achieve, not on the methods used to achieve it.
Businesses and manufacturers can predict sales based on their customers’ income and their products’ price. A company offering the lowest-priced product may feel confident in a consistent level of profit.
Contemporary Models
1. Engel-Kollat-Blackwell (EKB)
The Engel-Kollat-Blackwell model posits that there are five stages that consumers go through before making a purchase: problem recognition, information search, evaluation of alternatives, purchase, and post-purchase behavior.
- Awareness: During this stage, consumers view advertisements from a business and become aware of their need, desire, or interest, to purchase what they’ve just discovered.
- Information Processing: After discovering a product or service, a consumer begins to think about how the product or service relates to their past experiences or needs and whether it will fulfill any current needs.
- Evaluation: At this point, consumers will research the product they’ve discovered and research options from competitors to see if there is a better option or if the original product is the best fit.
- Purchasing Decision: A consumer will follow through with a purchase for the product that has beat out competitors to provide value. A consumer may also stop the process if they change their mind.
- Outcome Analysis: After making a purchase, a customer will use what they’ve bought and assess whether their experience is positive or negative.
2. Black Box model of consumer behavior
According to the Black Box model, customers are individual thinkers who make purchase decisions based on internal and external stimuli.
This model suggests that consumers are rational and make decisions based on how well a product meets their existing beliefs and needs.
3. Hawkins Stern impulse buying model
This theory suggests that people sometimes make purchases based on emotions or spur-of-the-moment desires, rather than rational thought.
These are certainly impulse purchases, but Hawkins Stern categorizes them into four different types:
- Escape Purchase: Sometimes called pure impulse, this involves purchasing an item that isn’t a routine item or on a shopping list. Consumers are drawn to these items through appealing visuals.
- Reminder Purchase: A consumer makes a reminder impulse purchase when they come across a product through in-store setups, promotional offers, or a simple reminder that a product exists, like a strategically placed ice cream scoop in the freezer aisle of a grocery store.
- Suggested Purchase: Suggested impulse purchases occur when a consumer is made aware of a product after a recommendation or suggestion from an in-store salesperson or online algorithms. For example, seeing an ad that says, “Other people who bought this shoe you’re about to buy also purchase these socks.”
- Planned Purchase: Although planned is the opposite of impulse, these purchases occur when a consumer knows they want a particular product but will only buy it if there is a deal involved.
4. Howard Sheth model of buying behavior
According to the Howard Sheth model of consumer behavior, the buyer’s journey is a highly rational and methodical decision-making process.
In this model, customers solve problems every step of the way, with different variables influencing the course of the journey.
According to this model, there are three successive levels of decision-making:
- Extensive Problem-Solving: In this stage, customers know nothing about the product they’re seeking or the brands that are available to them.
- Limited Problem-Solving: Now that customers have more information, they slow down and begin comparing their choices.
- Habitual Response Behavior: Customers are fully aware of all the choices they have and know which brands they prefer.
According to the Howard Sheth model, I was under the sway of several stimuli during this process:
- Inputs: This refers to the marketing messages and imagery a consumer receives while they’re going through the decision-making process. “Inputs” also refers to any perceptions and attitudes that come from the consumer’s social environment, such as their friends, family, and culture.
- Perceptual and Learning Constructs: This may sound complicated, but this stimulus is simply the customer’s psychological makeup and psychographic information.
- Outputs: After inputs and perceptual and learning constructs are mixed together, you get the output. The output is the customer’s resulting action under the influence of marketing messages, social stimuli, and internal psychological attributes.
- External Variables: This is anything that’s not directly related to the decision-making process, such as weather or religion, that still may sway the customer’s decision.
5. Nicosia Model
This model suggests that businesses should focus on their marketing messages in order to increase sales, rather than on the needs of the customer.
The model which places all the power on businesses is attractive, but it’s not advisable to disregard the internal factors that customers take into account when making a purchase decision.
The model is comprised of four “fields”:
- One: The business’ characteristics and the customer’s characteristics. What does your marketing messaging look like? And what’s your customer’s perception of that messaging? Are they predisposed to be receptive to your message? The latter is shaped by the customer’s personality traits and experiences.
- Two: Search and evaluation. Similar to the Howard Sheth model’s “limited problem-solving” stage, the customer begins to compare different brands here based on the company’s messaging.
- Three: Purchase decision. The purchase decision will occur after the company convinces the customer to choose them as their retailer or provider.
- Four: Feedback. During the feedback field, the company will determine whether it should continue using the same messaging, and the customer will decide whether they will continue to be receptive to future messages.
6. Webster and Wind model of organizational buying behavior
The Webster and Wind Model is a B2B buying behavior model that argues there are four major variables that affect whether an organization makes a purchase decision. Those are:
- Environmental Variables: Environmental variables refer to any external factors that could sway a purchase decision. Customer demands, supplier relationships, and competitive pressure are a few examples. Broader variables apply, too, such as technology, politics, and culture.
- Organizational Variables: Organizational variables refer to internal factors that could sway a purchase decision, such as the organization’s goals and evaluation criteria.
- Buying Center Variables: Who makes the final purchase decision? Who has the authority to sign the contract, and who influences the buying process? Buying center variables take all of this into account.
- Individual Variables: These variables refer to the demographic and psychographic information of the individual prospect at the business. What’s their education and level of experience? What are their goals and desires?
Psychological world of the decision makers
Expectations
The potential of alternative suppliers and brands to satisfy objectives in a buying decision is called an expectation.
The objectives most commonly mentioned include product quality, delivery time, quantity of supply, after-sale service, and price.
Even though numerous studies have shown the importance of several implicit factors like reputation, size, location, and reciprocity relationship with the supplier, sales representatives’ personality, technical expertise, salesmanship, and even life style can also play a critical role.
As oligopolistic markets become more standardized, the implicit criteria become increasingly important to industrial buyers.
You can measure how well a supplier or brand meets your expectations by looking at how well it helps you achieve your stated and unstated goals.
Typically, purchasing agents care mostly about price and delivery, engineers are concerned with the product’s technical specifications, and users are interested in the product’s features and how easy it is to use.
In general, delivery times, installation, and maintenance are important to product users; purchasing agents are concerned with getting the best price and shipping costs; and engineers want high quality products that meet their standards.
Background of Individuals
The most significant factor is the background and task orientation of the individuals involved in the buying process.
There can be substantial differences in the professional goals and values of purchasing agents, engineers and plant managers due to their different educational backgrounds.
In addition, the task expectations also generate conflicting perceptions of what each person’s role in the organization should be.
Differential expectations are developed based on the personal life styles of individual decision makers.
To learn more about someone’s background, you can look at their education and job experiences (which are similar to demographics in consumer behavior), and their interests, activities, and values (which can be measured using psychographic scales).
Information Sources and Active Search
The second and third factors that influence someone’s expectations are the type and source of information that they are exposed to, as well as their participation in the active search for information.
Purchasing agents are exposed to more commercial sources than other people, and the information is often not complete and is biased in favor of the supplier or the brand.
In some companies, it is not common for sales representatives to talk directly to the engineering or production personnel.
The people who work in engineering and production typically have less information than other people, and they usually get their information from professional meetings, trade reports, and word-of-mouth.
It is often assumed that purchasing agents are responsible for actively searching for information.
Perceptual Distortion
An individual will try to make the objective information fit with what they already know by distorting it.
There is no specific research on why people tend to distort information when it comes to industrial buyer behavior, but there is a lot of research on cognitive consistency that can explain this tendency.
It is difficult to quantify perceptual distortion by standard survey research methods. One possible approach is experimentation, but it is costly.
An alternative that is more realistic is to use perceptual mapping techniques, such as multidimensional scaling or factor analysis, to compare the differences in the judgments of purchasing agents, engineers, and production personnel with a common list of suppliers or brands.
Satisfaction with Past Purchases
Past buying experiences with a supplier or brand play a significant role in shaping the expectations of individuals involved in the purchase process. Different parties involved in the process often have different goals or criteria, which makes it difficult for a supplier or brand to create equal levels of satisfaction among them.
A supplier may have a lower price, but their delivery schedule may not work for you.
The organization usually gives each person a bonus for doing well in their particular job, so the purchasing agent gets a bonus for being thrifty, the engineer for making sure the products are high quality, and the production staff for being good at scheduling.
Even though the chosen supplier or brand may be the best possible option in terms of overall corporate goals, this can often lead to different levels of satisfaction for the different parties involved.
A person’s past experiences with a supplier or brand will directly influence their expectations of that supplier or brand.
You can measure the satisfaction variable by finding out how the supplier or brand is perceived by each of the three parties.
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