Consumer Behavior Model used for business .pptx

CONSUMER BEHAVIOR
• “CONSUMER BEHAVIOR IS THE ACTIONS AND THE DECISION PROCESSES OF PEOPLE WHO PURCHASE GOODS AND
SERVICES FOR PERSONAL CONSUMPTION” – ACCORDING TO ENGEL, BLACKWELL, AND MANSARD
• CONSUMER BUYING BEHAVIOR REFERS TO THE STUDY OF CUSTOMERS AND HOW THEY BEHAVE WHILE DECIDING TO BUY
A PRODUCT THAT SATISFIES THEIR NEEDS. IT IS A STUDY OF THE ACTIONS OF THE CONSUMERS THAT DRIVE THEM TO BUY
AND USE CERTAIN PRODUCTS.
• IMPORTANCE:
1. CONSUMER DIFFERENTIATION
2. RETENTION OF CONSUMERS:
3. DESIGN RELEVANT MARKETING PROGRAM
4. PREDICTING MARKET TREND
5. COMPETITION ANALYSIS
6. INNOVATE NEW PRODUCTS
7. STAY RELEVANT IN THE MARKET
8. IMPROVE CUSTOMER SERVICE

MODELS OF CONSUMER DECISION MAKING
1. SCHIFFMAN AND KANUK’S MODEL

• INTRODUCED BY LEON G. SCHIFFMAN, LESLIE LAZAR KANUK IN 1987 FURTHER MODIFIED IN 2000
AS MODEL OF CONSUMER DECISION-MAKING (SCHIFFMAN, HANSEN AND KANUK, 2000)
• SCHIFFMAN AND KANUK USES A MARKETING SEGMENTATION APPROACH TO EXPLAIN
CONSUMER BEHAVIOR. THE AUTHORS HAVE EXPLAINED THE MODEL IN THEIR BOOK NAMED
‘CONSUMER BEHAVIOR’.
• SCHIFFMAN AND KANUK EXPLAIN HOW THE INTERNET HAS CHANGED THE WAY HOW
CONSUMERS RESEARCH FOR A PRODUCT BEFORE MAKING A DECISION.
• IT SHOWS THREE DISTINCT BUT INTERTWINING STAGES:
A. THE INPUT STAGE (EXTERNAL INFLUENCES)
B. PROCESS STAGE (CONSUMER DECISION MAKING)
C. OUTPUT STAGE (POST-DECISION BEHAVIOR)

A. THE INPUT STAGE (EXTERNAL INFLUENCES)
• INFLUENCES THE CONSUMERS RECOGNITION OF A PRODUCT NEED, THROUGH 2 SOURCES OF
INFORMATION:
I. THE FIRMS MARKETING EFFORTS (4 P’S) – PRODUCT, PROMOTION, PRICE, CHANNELS OF DISTRIBUTION.
II. THE EXTERNAL SOCIO-CULTURAL INFLUENCE –FAMILY, FRIENDS, SOCIAL CLASS, CULTURE, INFORMAL
SOURCES, OTHER NON-COMMERCIAL SOURCES, ETC.
B. PROCESS STAGE (CONSUMER DECISION MAKING)
NEED RECOGNITION, PRE-PURCHASE SEARCH AND EVALUATION OF ALTERNATIVES INFLUENCED BY
PSYCHOLOGICAL FACTORS – MOTIVATION, LEARNING, PERCEPTION, PERSONALITY AND ATTITUDE.
C. OUTPUT STAGE (POST-DECISION BEHAVIOR)
I. PURCHASE BEHAVIOR – TRIAL, REPEAT PURCHASE
II. POST PURCHASE EVALUATION – SATISFACTION, DISSATISFACTION, RETURN (AFTER SALES INFLUENCE
THESE DECISIONS)

2. ASSAEL’S MODEL
• BASED ON THE LEVEL OF CUSTOMER
PARTICIPATION AND THE DEGREE OF BRAND
DIFFERENTIATION, HENRY ASSAEL IDENTIFIED
FOUR CATEGORIES OF CONSUMER
PURCHASING BEHAVIOR:
A. ROUTINIZED RESPONSE BEHAVIOR (RRB)/
HABITUAL BUYING BEHAVIOR: WHEN THE
CUSTOMER HAS ALREADY PURCHASED AND USED
THE PRODUCT, THIS HAPPENS. THIS TYPE OF
BEHAVIOR IS TYPICALLY EMPLOYED WHEN BUYING
INEXPENSIVE, REGULARLY USED THINGS. THE
PURCHASERS MAKE HASTY DECISIONS IN SUCH
CIRCUMSTANCES.
B. LIMITED PROBLEM SOLVING (LPS)/ DISSONANCE
REDUCING BUYING BEHAVIOR: THE CONSUMER IS
FAMILIAR WITH THE PRODUCT AND VARIOUS
BRANDS AVAILABLE, BUT HAS NO ESTABLISHED
BRAND PREFERENCE.

C. EXTENSIVE PROBLEM SOLVING (EPS)/COMPLEX BUYING BEHAVIOR:
DUE TO THE CONSUMER'S UNFAMILIARITY WITH THE PRODUCT CLASS AND LACK OF
KNOWLEDGE ON THE CRITERIA TO BE TAKEN INTO ACCOUNT WHEN MAKING A
PURCHASE, THIS BEHAVIOR IS REFERRED TO AS COMPLICATED PURCHASING. WHEN A
CONSUMER COMES ACROSS A NEW PRODUCT CATEGORY, THEY MUST SOLVE
SEVERAL PROBLEMS. HE NEED DETAILS ON BOTH THE PRODUCT CATEGORY AND THE
DIFFERENT BRANDS THAT FALL WITHIN IT.
D. VARIETY SEEKING: EVEN WHEN CONSUMERS SAY THEY ARE HAPPY WITH THEIR
CURRENT BRAND, THEY NEVERTHELESS SWITCH. VARIETY SEEKING IS THE
MOTIVATION, AND IT IS MOST PREVALENT WHEN THERE ARE LOTS OF OPTIONS THAT
ARE SIMILAR, WHEN BRAND LOYALTY IS SIGNIFICANT, AND WHEN PURCHASES ARE
MADE FREQUENTLY.

3. SIMPLE STIMULUS RESPONSE MODEL OR BLACK
BOX MODEL

 AT THE CENTER FOR MARKETING STUDIES AT CAMBRIDGE UNIVERSITY, PROFESSOR GEOFFREY JONES AND A
COLLEAGUE CREATED THE FIRST MODEL (OR FRAMEWORK) OF CONSUMER BEHAVIOR. RODNEY HITCHIN
AND OTHER AUSTRALIAN SCHOLARS HAVE EXPANDED ON IT. THEY MADE THE ARGUMENT THAT CONSUMERS
FREQUENTLY ARE UNSURE OF THE FACTORS INFLUENCING THEIR PURCHASING DECISIONS. THE RESPONSES
TO THOSE QUERIES ARE FREQUENTLY OBSCURED IN THE CLIENT'S MEMORY.
 THE THREE MAIN PARTS OF THE MODEL ARE THE ENVIRONMENT, THE BUYER'S BLACK BOX, AND THE
BUYER'S RESPONSES.
 THE BLACK BOX STIMULUS-RESPONSE THEORY OF CONSUMER BEHAVIOR, WAS FIRST PUBLISHED IN 1967
BY PHILIP KOTLER IN HIS BOOK "MARKETING MANAGEMENT.“
 THE BLACK BOX MODEL DEPICTS HOW STIMULI, CONSUMER TRAITS, DECISION-MAKING, AND CONSUMER
REACTIONS INTERACT. INTERPERSONAL STIMULI (BETWEEN PERSONS) AND INTRAPERSONAL STIMULI CAN
BE SEPARATED (WITHIN PEOPLE).
 WHILE BUSINESSES PLAN AND IMPLEMENT MARKETING STIMULI, SOCIAL ELEMENTS, DEPENDING ON THE
ECONOMIC, POLITICAL, AND CULTURAL CONTEXT OF A SOCIETY, PROVIDE ENVIRONMENTAL STIMULI. THE
DECISION PROCESS, WHICH DECIDES THE BUYER'S ANSWER, IS INCLUDED IN THE BUYER'S BLACK BOX.
 THE BLACK BOX MODEL ASSUMES THAT THE CUSTOMER HAS ACKNOWLEDGED THE ISSUE AND THAT THEIR
ANSWER IS THE PRODUCT OF A PURPOSEFUL, LOGICAL DECISION-MAKING PROCESS. HOWEVER, IN
PRACTICE, A LOT OF CHOICES ARE NOT MADE BY CONSUMERS WITH KNOWLEDGE OF A KNOWN ISSUE.
WHEN A CUSTOMER NOTICES A PROBLEM, THEY LOOK FOR INFORMATION ABOUT GOODS AND SERVICES
THAT CAN ADDRESS IT.
 USED IN MOVIES, INSURANCE, AVIATION, FINANCIAL MODELING.

APPROACHES TO CONSUMER
BEHAVIOR
THREE APPROACHES TO THE STUDY OF CONSUMER BEHAVIOR ARE ALL BASED ON
UNDERSTANDING THE FUNCTIONING OF THE MIND, EACH TAKES A DIFFERENT
PERSPECTIVE ON THE CONSUMER IN ORDER TO INTERPRET THEIR BEHAVIOR.
COGNITIVE,
PSYCHODYNAMIC
BEHAVIORAL

CONSUMER MODELING AND DECISION MAKING
1.TRADITIONAL MODELS
• TRADITIONAL BEHAVIOR MODELS WERE DEVELOPED BY ECONOMISTS HOPING TO UNDERSTAND WHAT
CUSTOMERS PURCHASE BASED ON THEIR WANTS AND NEEDS. TRADITIONAL MODELS INCLUDE THE
FOLLOWING:
A. LEARNING MODEL: ACCORDING TO THE LEARNING MODEL, CONSUMERS INITIALLY MAKE PURCHASES TO
ADDRESS THEIR BASIC REQUIREMENTS BEFORE MOVING ON TO SATISFY NEWLY ACQUIRED DEMANDS. FOR
INSTANCE, A HUNGRY CONSUMER WOULD SATISFY THEIR DEMAND FOR FOOD BEFORE SATISFYING A
LEARNED DESIRE TO DRESS IN FASHIONABLE ATTIRE.
B. PSYCHOANALYTICAL MODEL: CUSTOMERS MAKE PURCHASES BASED ON HOW YOUR BUSINESS'S STIMULI,
LIKE AN INSTAGRAM ADVERTISEMENT, APPEAL TO THEIR DESIRES.
C. SOCIOLOGICAL MODEL: ACCORDING TO THE SOCIOLOGICAL MODEL OF CONSUMER BEHAVIOR, AN
INDIVIDUAL'S POSITION AMONG SEVERAL SOCIOCULTURAL GROUPS, INCLUDING FAMILY, FRIENDS.
D. ECONOMIC MODEL: THIS MODEL ARGUES THAT CONSUMERS TRY TO MEET THEIR NEEDS WHILE SPENDING
AS FEW RESOURCES (E.G. MONEY) AS POSSIBLE. EX : THE RELATIONSHIP BETWEEN INTEREST RATES AND
ASSETS MARKETS. THAT MEANS THAT BUSINESSES AND MANUFACTURERS CAN PREDICT SALES BASED ON
THEIR CUSTOMERS’ INCOME AND THEIR PRODUCTS’ PRICE

2.CONTEMPORARY MODELS
1. HOWARD SHEITH MODEL OF BUYING BEHAVIOR:

 AS THE CUSTOMER TRANSITIONS FROM EXTENSIVE ISSUE SOLVING TO ROUTINIZED PROBLEM SOLUTION BEHAVIOR,
THIS MODEL HAS TAKEN THE LEARNING THEORY NOTION TO DESCRIBE BRAND CHOOSING BEHAVIOR. IT MAKES AN
EFFORT TO SHED LIGHT ON THE RATIONAL BRAND BEHAVIOR DISPLAYED BY CONSUMERS IN SITUATIONS INCLUDING
INSUFFICIENT KNOWLEDGE AND CONSTRAINED CAPACITIES.
 FOUR COMPONENTS INVOLVED IN THE MODEL:
a. INPUT VARIABLES: SIGNIFICANT STIMULI ARE THE REAL BRAND COMPONENTS THAT CONSUMERS ENCOUNTER.
MARKETING PROFESSIONALS EMPLOY SYMBOLIC STIMULI TO DEPICT THEIR PRODUCTS IN A SYMBOLIC WAY. THE
SOCIAL ENVIRONMENT, INCLUDING FAMILY, FRIENDS, GROUPS, ETC., PRODUCES SOCIAL STIMULI.
b. OUTPUT VARIABLES: THERE ARE FIVE OUTPUT VARIABLES WHICH ARE THE BUYER’S OBSERVABLE RESPONSES TO
STIMULUS INPUTS. THEY APPEAR IN THE SEQUENCE AS BELOW:-
ATTENTION:- BASED ON THE IMPORTANT OF THE BUYER’S INFORMATION INTAKE.
COMPREHENSION:- THE STORE OF INFORMATION THE BUYER HAS ABOUT THE BRAND.
ATTITUDE:- THE BUYER’S EVALUATION OF THE PARTICULAR BRAND’S POTENTIAL TO SATISFY HIS OR HER MOTIVES.
INTENTION:- THE BRAND WHICH THE BUYER INTENDS TO BUY.
PURCHASE BEHAVIOR:- THE ACT OF ACTUALLY PURCHASING, WHICH REFLECTS THE BUYER’S PREDISPOSITION TO BUY
AS MODIFIED BUY ANY OF THE INHIBITORS.
c. HYPOTHETIC CONSTRUCTS:
• PERCEPTUAL CONSTRUCTS: INFORMATION PROCESSING IS THE FOCUS OF PERCEPTUAL CONSTRUCTS. AMONG THE
PERCEPTUAL CONSTRUCTS THE DEGREE TO WHICH THE CONSUMER CONTROLS THE STIMULUS INFORMATION FLOW IS
REFERRED TO AS INFORMATION SENSITIVITY. INFORMATION DISTORTION OR MODIFICATION ARE EXAMPLES OF
PERCEPTUAL BIAS. SEARCHING FOR INFORMATION ENTAILS MAKING A CONSCIOUS EFFORT TO LEARN MORE ABOUT THE
BUSINESSES OR THEIR FEATURE.

• LEARNING CONSTRUCTS: MOTIVES ARE OVERARCHING OR PARTICULAR OBJECTIVES THAT DRIVE
BEHAVIOR. THE BUYER'S OPINION OF THE BRANDS IN HIS OR HER EVOKED SET'S CAPACITY TO MEET HIS
OR HER OBJECTIVES IS REFERRED TO AS BRAND POTENTIAL OF THE EVOKED SET. THE MOTIVES SERVE AS
DECISION MEDIATORS. THE BUYER WILL USE A SET OF MENTAL FILTERS TO COMPARE AND RATE THE
POTENTIAL PURCHASES. PREDISPOSITION IS THE EXPRESSION OF AN ATTITUDE TOWARD CERTAIN BRANDS
IN THE EVOKED SET THROUGH A PREFERENCE FOR THOSE BRANDS. ENVIRONMENTAL FACTORS LIKE PRICE
AND TIME CONSTRAINTS MIGHT PREVENT OR RESTRICT THE PURCHASE OF A CHOSEN BRAND. THESE
FACTORS ARE REFERRED TO AS INHIBITORS.
D. EXOGENOUS VARIABLES:
 PURCHASE IMPORTANCE
 PERSONALITY VARIABLES
 CULTURE
 SOCIAL CLASS
 ORGANIZATION
 TIME PRESSURE
 FINANCIAL STATUS

LIMITATIONS OF THE MODEL
 EXOGENOUS VARIABLES ARE NOT CLEARLY DISTINGUISHED FROM OTHER VARIABLES.
 THERE ARE CERTAIN FACTORS THAT ARE BOTH DIFFICULT TO MEASURE AND POORLY DEFINED.
 THE MODEL IS DIFFICULT TO UNDERSTAND AND HIGHLY COMPLICATED.
 IN BOTH SIGNIFICANT AND SYMBOLIC STIMULI, THE MODEL EMPHASIZES MATERIAL ASPECTS SUCH AS PRICE AND
QUALITY.
EXAMPLES OF THE MODEL

 PROPOSED IN 1966 BY FRANCESCO NICOSIA.
 THIS STRATEGY CREATES A CONNECTION BETWEEN THE BUSINESS AND ITS POTENTIAL CLIENT IN AN
EFFORT TO EXPLAIN PURCHASING BEHAVIOR. IT ANALYSES PEOPLE AS SYSTEMS, WITH STIMULI SERVING
AS THE SYSTEM'S INPUT AND HUMAN BEHAVIOR SERVING AS THE SYSTEM'S OUTPUT. THE CONCEPT
CONTENDS THAT THE CONSUMER'S INCLINATION TOWARD A PRODUCT OR SERVICE IS INFLUENCED BY
THE INITIAL COMMUNICATIONS, AND THAT THE CONSUMER WILL ADOPT A CERTAIN ATTITUDE TOWARD
A PRODUCT DEPENDING ON THE CIRCUMSTANCES.
 THIS CAN PROMPT THE CONSUMER TO LOOK FOR THE PRODUCT OR CHANGE THE QUALITIES OF THE
PRODUCT. IF THE CONSUMER IS SATISFIED WITH THE INFORMATION ABOVE, IT MAY PRODUCE A
FAVORABLE REACTION AND A CHOICE TO PURCHASE THE PRODUCT; OTHERWISE, THE RESERVE MIGHT
HAPPEN.
FIELD 1:- THE CONSUMER ATTRIBUTE AND THE FIRM’S ATTRIBUTES. THE ADVERTISING MESSAGE SENT
FROM THE COMPANY WILL REACH THE CONSUMER ATTRIBUTES.
FIELD 2:- IT IS RELATED TO SEARCH AND EVALUATION, UNDERTAKEN BY THE CONSUMER, OF THE
ADVERTISED PRODUCT AND ALSO TO VERIFY IF OTHER ALTERNATIVES ARE AVAILABLE.
FIELD 3:- IT EXPLAINS HOW THE CONSUMER ACTUALLY BUYS THE PRODUCT.
FIELD 4:- IT IS RELATED TO THE USES OF THE PURCHASED ITEMS. THIS FOURTH AREA CAN ALSO BE USED AS
AN OUTPUT TO RECEIVE FEEDBACK ON SALES RESULTS BY THE ORGANIZATION

LIMITATIONS OF THE MODEL
• DUE TO ITS SIMPLICITY, NICOSIA’S MODEL MAY NOT BE SUITABLE FOR COMPLEX
VARIABLES. THERE ARE THREE MAJOR CRITICISMS AGAINST THE NICOSIA
MODEL.
• THE QUESTIONABLE ASSUMPTION THAT THE CONSUMER HAS NO PRIOR
KNOWLEDGE OR EXPERIENCE OF THE PRODUCT LIMITED UNDERSTANDING OF
THE ROLE OF CONSUMER PSYCHOLOGY IN THE DECISION-MAKING PROCESS
• ENGEL, BLACKWELL & KOLLAT (1978) CRITICIZE THE NICOSIA MODEL BECAUSE
THEY SAY THAT IT HAS NOT RECEIVED ENOUGH SUPPORT AND RESEARCH TO
PROVE ITSELF. ALSO, THAT THE MODEL HAD NOT BEEN REVISED TO REFLECT
CHANGES IN TASK COMPLEXITY OR OTHER FACTORS.
• EG- MOST OF THE B2C BUSINESSES

3.ENGEL-KOLLAT-BLACKWELL MODEL

 The EKB model was developed by Engel, Kollat and Blackwell in 1973
 Consumers make decisions in five stages according to the Engel-Kollat-Blackwell model
of consumer behavior before making a purchase.
I. 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.
II. 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.
III. 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.
IV. 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.
V. OUTCOME ANALYSIS: After making a purchase, a customer will use what they’ve bought and
assess whether their experience is positive or negative. After a trial period, they’ll keep a
product and maybe decide to become repeat customers or express dissatisfaction and return
to stage three.

4. ENGEL –BLACKWELL AND MINIARD (EBM) MODEL

The Consumer Decision Model (also known as the Engel-Blackwell-Miniard Model)
was originally developed in 1968 by Engel, Kollat, and Blackwell and has gone
through numerous revisions.
The model is structured around a seven point decision process: need recognition
followed by a search of information both internally and externally, the evaluation of
alternatives, purchase, post purchase reflection and finally, divestment.
These decisions are influenced by two main factors. Firstly stimuli is received and
processed by the consumer in conjunction with memories of previous experiences,
and secondly, external variables in the form of either environmental influences or
individual differences.

ADVANTAGES:
I. ONE OF THE KEY STRENGTHS OF THE
CONSUMER DECISION MODEL IS
THAT IT HAS CONTINUED TO EVOLVE
SINCE ORIGINAL PUBLICATION IN
1968 (J.F. ENGEL, KOLLAT ET
AL. 1968), EVOLUTIONS THAT
SHOULD HAVE IMPROVED THE
EXPLANATORY POWER OF THE
MODEL IN LIGHT OF ADVANCES IN
CONSUMER BEHAVIOR THEORY AND
KNOWLEDGE.
II. THE MODEL PROVIDES A CLEAR
DEPICTION OF THE PROCESS OF
CONSUMPTION MAKING IT EASY TO
COMPREHEND AND INTUITIVELY
PLEASING
DISADVANTAGES
I. PARTICULAR PROCESSES ARE MORE LIKELY TO BE
IMPACTED BY HUMAN AND ENVIRONMENTAL
VARIABLES THAN OTHERS. THIS DEFIES LOGIC
AND IGNORES FURTHER EFFECTS THAT SUCH
CHARACTERISTICS CAN HAVE ON BROADER
PROCESSES. FOR INSTANCE, INDIVIDUAL
VARIATIONS MIGHT HAVE A BIG IMPACT ON THE
MARKETING STIMULI THAT CONSUMERS ARE
EXPOSED TO IN THE FIRST PLACE AS WELL AS HOW
THEY PERCEIVE AND PROCESS THOSE STIMULI.
II. THE DEFINITION AND FUNCTION OF THE
ENVIRONMENTAL AND INDIVIDUAL FACTORS
HAVE BEEN CRITICIZED FOR BEING TOO VAGUE
(LOUDON AND DELLA BITTA 1993); FOR INSTANCE,
THE EFFECT OF ENVIRONMENTAL VARIABLES IS
ACKNOWLEDGED, BUT THEIR FUNCTION IN
INFLUENCING BEHAVIOR IS NOT ADEQUATELY
ARTICULATED.
III. THE IMPORTANCE OF INDIVIDUAL PURCHASING
MOTIVATIONS IS ONLY HINTED AT INSIDE NEED
RECOGNITION, WHICH SEEMS TO PARTIALLY
OVERLOOK A WEALTHY CONSUMER.

4.WEBSTER AND WIND MODELS 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.
• Frederick E. Webster, Jr. and Yoram Wind in 1972
• It considers four sets of variables:
1. ENVIRONMENTAL,
2. ORGANIZATIONAL,
3. BUYING CENTER, AND
4. INDIVIDUAL, WHICH, AFFECT THE BUYING-DECISION MAKING PROCESS IN A FIRM.

1. ENVIRONMENTAL INFLUENCES: THE ENVIRONMENT INFLUENCES THE BUYING BEHAVIOR IN FOUR
DISTINCT WAYS.
I. THEY REFLECT THE IMPACT OF TECHNOLOGICAL, PHYSICAL AND ECONOMIC FACTORS DEFINING THE
AVAILABILITY OF GOODS AND SERVICES.
II. IT IS RELATED TO THE OVERALL CONDITIONS THAT THE BUSINESS FACES, CONCERNING FOR EXAMPLE:
INTEREST RATES, NATIONAL INCOME, UNEMPLOYMENT, ETC.
III. CULTURAL, SOCIAL AND LEGAL FORCES INFLUENTIAL IN HOW INTERPERSONAL AND INTER-
ORGANIZATIONAL RELATIONSHIPS ARE HELD.
IV. THE FOURTH AND FINAL VARIABLE, CONCERNS THE MARKETING INFORMATION FLOW IN THE
ORGANIZATION.
2. ORGANIZATIONAL INFLUENCES:
ORGANIZATIONAL FACTORS CAUSE INDIVIDUAL DECISION MAKERS TO ACT DIFFERENTLY THAN THEY WOULD IF
THEY WERE FUNCTIONING ALONE OR IN A DIFFERENT ORGANIZATION.
IN ORDER TO UNDERSTAND THE INFLUENCE OF FORMAL ORGANIZATIONS ON BUYING BEHAVIOR, WEBSTER
AND WIND (1972) REFLECT ON LEAVITT (1964) WHO AFFIRMS THAT ORGANIZATIONS ARE MULTIVARIATE
SYSTEMS COMPOSED OF FOUR SETS OF INTERACTING VARIABLES: ORGANIZATIONAL TASKS, STRUCTURE,
TECHNOLOGY AND PEOPLE

 Buying Tasks: The buying tasks are strongly related to organizational tasks to achieve the
organizational goals. buying tasks can be further defined according to four dimensions:
I. The organizational purpose: whether the reason for buying is to facilitate production, or for resale,
or to be consumed in the performance of other organizational functions;
II. The nature of demand: especially whether demand for the product is generated within the buying
organization or by forces outside the organization as well as other characteristics of the demand
pattern such as seasonal fluctuations;
III. The extent of programming: the degree of routinization at the five stages of the decision process;
and
IV. The degree of decentralization: the extent to which buying authority has been delegated to
operating levels in the organization.
 Organizational Structure: organizational structure consists of subsystems of-
I. Communication: The main functions of the communication system are information, command and
instruction, influence and persuasion and integration.
II. Authority: authority is critical because it defines who is in charge of evaluation and decision.
III. Status: The status expresses itself in an informal structure of the organization, but has equal
relevance to the structure
IV. Rewards: A careful analysis of the reward system in the organization can be very helpful to predict
the integrants of the buying center response to marketing efforts.
V. Workflow: it is needless to say that the work flow of the buying center is important, besides the
fact that it provides documentation and data for further analysis and even academic research.
3. BUYING CENTER: The interaction of a four set of variables (tasks, structure, technology and actors) in
the buying center leads to unique buying behavior in each customer organization.

4. INDIVIDUAL AND SOCIAL INFLUENCES: It is useful to consider three aspects of role performance:
I. Role expectations (prescriptions and prohibitions for the behavior of the person occupying the role and
the behavior of other persons towards a given role);
II. role behavior (actual behavior in the role); and
III. role relationships (the multiple and reciprocal relationships among members of the group).
5. TASK AND NON TASK MOTIVES: The organizational buyer´s motivation has both task and non-task
dimensions. Task-related motives relate to the specific buying problem to be solved and involve the general
criteria of buying the right quality in the right quantity at the right price for delivery at the right time from the
right source.
An organizational buyer put his personal preferences influencing his buying decision over the organizational
considerations. This would only be possible in a situation where all other variables are “equal”. By these
variables is meant product specification, price, quality and service. In the event of this situation to be
presented, the organizational buyer may be motivated by only personal, non-task variables to finalize this
purchase. As an example, the preference of dealing with a specific salesman can be cited as well as a gift or
favor available from the supplier.

5. THE SHEITH MODELS OF INDUSTRIAL BUYING

• Jagdish N. Sheth is professor of business and research professor in the College of Commerce and Business
Administration, University of Illinois, Urbana-Champaign.
1.EXPECTATIONS: Expectations refer to the perceived potential of alternative suppliers and
brands to satisfy a number of explicit and implicit objectives in any particular buying decision. The
present model specifies five different processes which create differential expectations among the
individuals involved in the purchasing process:
(1a) the background of the individuals,
(1b) information sources,
(1c) active search,
(1d) perceptual distortion, and
(1e) satisfaction with past purchases.
2. INDUSTRIAL BUYING PROCESS: There are six primary factors which determine whether a
specific buying decision will be joint or autonomous.
(2a) characteristics of the product or service: time pressure, perceived risk, purchase type and
(2b)the characteristics of the buyer company: orientation, size, degree of centralization.

3. CONFLICT RESOLUTION/ PROCESS OF JOINT DECISION MAKING: The major thrust
of the present model of industrial buying decisions is to investigate the process of joint
decision making. This includes-
 initiation of the decision to buy,
 gathering of information,
 evaluating alternative suppliers, and
 resolving conflict among the parties who must jointly decide.
4.SITUATIONAL FACTORS: similar to consumer behavior, the industrial buyers often decide
on factors other than rational or realistic criteria. These include:
 temporary economic conditions such as price controls, recession, or foreign trade;
 internal strikes, walkouts, machine breakdowns, and other production-related events;
 organizational changes such as merger or acquisition; and
 ad hoc changes in the market place, such as promotional efforts, new product
introduction, price changes, and so on, in the supplier industries.

THE MODEL OF INDUSTRIAL BUYER BEHAVIOR DESCRIBED ABOVE
SUGGESTS THE FOLLOWING IMPLICATIONS FOR MARKETING RESEARCH.
 In order to explain and predict supplier or brand choice in industrial buyer behavior, it is necessary
to conduct research on the psychology of other individuals in the organization in addition to the
purchasing agents.
 It is possible to operationalize and quantify most of the variables included as part of the model.
While some are more difficult and indirect, sufficient psychometric skill in marketing research is
currently available to quantify the psychology of the individuals.
 although considerable research has been done on the demographics of organizations in industrial
market research
 a systematic examination of the power positions of various individuals involved in industrial
buying decisions is a necessary condition of the model.
 it is essential in building any market research information system for industrial goods and services
that the process of conflict resolution among the parties and its impact on supplier or brand choice
behavior is carefully included and simulated.
 it is important to realize that not all industrial decisions are the outcomes of a systematic decision-
making process. There are some industrial buying decisions which are based strictly on a set of
situational factors for which theorizing or model building will not be relevant or useful.

STEPS IN CONSUMER DECISION MAKING PROCESS
[CDMP]

REFERENCE
• HTTPS://WWW.CLOOTRACK.COM/KNOWLEDGE_BASE/WHAT-IS-CONSUMER-
BEHAVIOR#:~:TEXT=%E2%80%9CCONSUMER%20BEHAVIOR%20IS%20THE%20ACTIONS,PRODUCT%20THAT%20SATISFIES%20THEIR%2
0NEEDS.
• HTTPS://WWW.RESEARCHGATE.NET/FIGURE/A-MODEL-OF-CONSUMER-DECISION-MAKING-SCHIFFMAN-KANUK-
2004_FIG1_268747644
• HTTPS://WWW.BATHEORIES.COM/SCHIFFMAN-AND-KANUKS-MODEL/
• HTTPS://COURSES.LUMENLEARNING.COM/CLINTON-MARKETING/CHAPTER/READING-THE-BLACK-BOX-OF-CONSUMER-
BEHAVIOR/
• HTTPS://BLOG.HUBSPOT.COM/SERVICE/CONSUMER-BEHAVIOR-MODEL
• HTTPS://COMMERCEMATES.COM/HOWARD-SHETH-MODEL/
• HTTPS://WWW.SLIDESHARE.NET/SAURABHMISHRA507/CONTEMPORARY-MODELS-OF-CONSUMER-BEHAVIOUR-229475528
• HTTP://SHOUBHIKNOTES.BLOGSPOT.COM/2015/05/ENGEL-BLACKWELL-MINIARD-MODEL.HTML
• HALMSTAD UNIVERSITY, SCHOOL OF BUSINESS AND ENGINEERING, MASTER PROGRAM IN INTERNATIONAL MARKETING, MASTER OF
SCIENCE DEGREE UNDERSTANDING BUYER BEHAVIOR IN THE CONTEXT OF PRODUCT ADAPTATION, AUTHORS: DOUGLAS EDUARD
STEINERT, 880727-T492 FERNANDA BENTO ZEN, 890721-T125
• HTTPS://WWW.JAGSHETH.COM/CONSUMER-BEHAVIOR/A-MODEL-OF-INDUSTRIAL-BUYER-
BEHAVIOR/#PROCESS_OF_JOINT_DECISION_MAKING

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