A model a is simplifiedversion of reality, it has never been reality, it isn’t reality and it will never be reality...
… therefore all modelsare subject to criticism(oh and if we are a bit postmodern, we could ask, what is reality)
ObjectivesAt the end of this session, you should be able to: Understand the concept of modelling within consumer behaviour studies; Evaluate the applicability of traditional models of consumer behaviour; Evaluate the applicability of contemporary models of consumer behaviour. Understand the main components of the assignment
1. The models hall of fame • Maslow’s 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 Ajzen’s Behavioural Intention model • Fritz Heider Balance Theory • E.Roger’s adoption and diffusion of innovations • Image congruency theory • Information processing
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. Describe 2. Explain 3. Predict 4. Control Are all these functions realistic?
3. Types of models Algebraic models:Fishbein’s Attitude Model n Ao= ∑=biei i=1 Ao = the person’s overall attitude towards the object bi= the strength of his belief that the object is related to attribute I (e.g. ASDA is good value for money) ei= his evaluation or intensity of feelings (liking or disliking) toward attribute i n= the number of relevant beliefs for that person
3. Types of models Conceptual models: Hierarchy of needs, (Maslow)
3. Types of models Personal variable models: a take on Ajzen’s Theory of Planned Behaviour (1991)
3. Types of models Comprehensive Models: Howard-Sheth Model
4. Consumer behaviour models: A brief history4.1. Traditional Models of consumersEarly models derive from economics and were interested in studying how scarce resources are allocated to quench and unlimited amount of wants and needs (Loudon and Della Bitta, 1993)• Macroeconomics• Microeconomics
4. Traditional models of consumer behaviourFocus: Aggregate flows in the economy ics om on ec Focus: The act of purchasing ro ac 1. Microeconomics M
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 purchase’s marginal satisfaction – Price is key What are the limitations of this approach? – Consumers rational
4.2. Macroeconomics (from Loudon and Della Bitta, 1993) • Looks at the overall economy; the value of goods; from these conclusions are drawn about consumers’ behaviour influencing these flows • Relative income hypothesis: how much is spent it not solely determined by income but is influenced by peers • Permanent income hypotheses: consumers determine how much to spend based on a perceived average of what can be consumed and not only on income • Consumers’ behaviour is not taken into account What are the limitations of this approach?
4.2.1. Behavioural economics (from Loudon and Della Bitta, 1993) • George Katona introduces the need to look at psychological influences guiding consumer’s behaviour: behavioural economics • Consumers will purchase products when they have confidence in the economy (consumer sentiment) The Katona Model (source: Loudon and Bella Ditta, 1993) Actual Psychological Consumer Economic economic process sentiment behaviour conditions Could this model help an organisation in any of its activities?
4.3. Limitations Is this you? Do you know anybody who thinks like this?
5. Contemporary Models 5.1. Nicosia Model 5.2. Howard-Sheth 5.3. Engel-Blackwell- Model Kollat
5.1. Nicosia Model (1966) Field Two: Search for and Field One: From the source of a message evaluation of means-end(s) to the consumer’s attitude relation(s) (Pre-Action Field) Sub-field two: Sub-field two: Sub-field one: Sub-field one: MESSAGE Consumer’s Firm’s attributes Consumer’s Firm’s attributes EXPOSURE attributes ATTITUDE attributes (pre-dispositions) (pre-dispositions) Search Search Evaluation Evaluation EXPERIENCE MOTIVATION FEEDBACK Consumption Consumption Field Four: Decision Decision The feedback PURCHASING BEHAVIOUR Field Three: The act of purchaseCould this model help an organisation inany of its activities?
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? What type? – Is this for a new product? Is this the first exchange the consumer has had 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?
5.2. Howard-Sheth Model (1969) ExogenousPerceptual VariablesConstructs Outcome 1 Learning Constructs Could this model help an organisation in any of its activities?
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 not been made – The model cannot be generalised, it cannot be applied to co-joint decision making for example – Can this model be applied for non-branded products (Rau and Samiee, 1981)? • 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?
5.3. Engel, Blackwell and Miniard (1990) Could this model help an organisation in any of its activities?
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- scientific Do you agree with these? Can you t think of any other limitations?
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
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?
Assessment• The proposal (200 words worth 10% of your final grade) – SUBMISSION DATE: MONDAY, 20TH NOVEMBER• A report (2070-2530 words worth 40% of your final grade) – SUBMISSION DATE: MONDAY, 15TH JANUARY• End of year examination, worth 50% of your final grade
Assignment’s main components• Select a company or not-for-profit organisation that you are familiar with;• Evaluate how a specific consumer behaviour theory or model can aid in understanding consumers’ behaviour and guide marketing/advertising practice.
Assignment guidelines• Consider the options offered in page 10 of your unit guide; – Go over guidelines offered and the assessment criteria• Read lecture notes and accompanying reading in order to select theory or model;• Select an organisation that would benefit from your analysis – Conduct an environmental scanning to construct a justification for why there would be a need for your evaluation