Models of Consumer Behaviour

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Models of Consumer Behaviour

• Week 2
• Consumer Behaviourand Food Marketing

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Models of Consumer Behaviour

• Types of consumption
• Purchase paradigms
• Modelling food consumption behaviour
• Human responses in a commercial world (East,
  chapter 1)

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What determines food choice?

• Prices Income Preferences
• There are three types of influences on preference
  and choices for food
• Characteristics of the product
• Characteristics of the individual
• Characteristics of the environment

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Types of consumption

• Important purchases (relevance)
• Repetitive consumption (frequency)
• Involuntary consumption (freedom)
• Group consumption (susceptibility to social
  influence)

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Important purchases

• Product purchased for the first time
• Infrequently purchased products
• Time and effort to choose
• Little experience
• High involvement
• Going to a new restaurantChoosing the menu for
  an important dinner

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Repetitive consumption

• Frequent purchase
• Low price (or standard quality/variability?)
• Little conscious attention
• Low involvement
• Experience goods
• Salt at the supermarket

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Involuntary consumption

• Unavoidable consumption
• Petrol for the car
• Telephone
• Repair of roads (social form, public goods)
• Choice between brands?
• Tap water

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Group consumption

• Purchase based on some group influence process
• Family expenditures
• Company purchases
• Mineral water

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Purchase paradigms, theories and models
Paradigm (perspective, framework)
Theory
MODEL
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Why do we need Consumer Behaviour theories,
paradigms and models?

• To support marketing practices as
• Use of pricing incentives
• Impact on sales
• Reaction after the end of price cuts
• Understanding reasons behind consumer behaviour
• Advertising
• Impact on sales (or loyalty or brand recognition)
• Duration of effects
• Underlying mechanisms
• Brand extension
• Impact on the new product
• Impact on the old product
• Why?

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Example price cuts

• During promotion sales (quantity) up by 50
• After promotion sales at same level as before
• Why?
• of new purchasers
• Perception low prices as low quality

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Purchase paradigms

• Are not mutually exclusive
• Subjective preferences
• Appropriateness for particular conditions

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Purchase paradigms

• Cognitive paradigm (US)
• Purchase as the outcome of problem-solving
• Reinforcement paradigm (UK)
• Purchase as learned behaviour
• Habit paradigm
• Pre-established pattern of behaviour

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The Cognitive paradigm

• Decision-making as an explanation for consumer
  behaviour
• The cognitive consumer is credited with the
  capacity to receive and handle considerable
  quantities of information, to engage actively in
  the comparative evaluation of alternative
  products and brands, and to select rationally
  among them Foxall

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Cognitive paradigm

• Does it work?
• Typical purchase (especially for food)
• Few alternatives
• Little external search
• Few evaluative criteria
• Engel, Blackwell and Miniard (1995)

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Extended Problem Solving

• New and important purchases

Problem/need recognition
Search for information
Evaluation of alternatives
Purchase
Consumption
Post-consumption evaluation
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Limited problem solving

• Even in new purchase there are no time, resource
  and motivation to the search
• Search for information and evaluation of
  alternatives are limited

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Habitual decision-making

• Loyalty to the brand
• Inertia
• The need is satisfied, but there is no special
  interest in the product
• Food products
• Satisficing behaviour
• Accept the first solution that is good enough to
  satisfy your need, even if a better solution may
  be missed

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Satisficing behaviour (Simon, 1957 Klein, 1989)
Need recognition
Evaluation of single Option
NO
Purchase?
YES
END
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The Reinforcement paradigm (Learning Theory)

• Reinforcer an experience which raises the
  frequency of responses associated with it
• Punisher an experience which reduces the
  frequency of such response
• Skinner, 1938 1953

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The learned behaviour theory

• Past behaviour teaches us, and after learning we
  can modify later behaviour
• Satisfaction/unsatisfaction with a product
• It is a valid theory both under the reinforcement
  and habit paradigm

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Some types of learning

• Classic conditioning (Pavlovs dog)
• Watson and Rayner Little Albert (1920) rats,
  iron bars and the generalising effect
• Learning is generalised
• Brand extension use of an existing brand for a
  new product
• Use of stimuli packaging, brand names, colours,
  smells, music, context of purchase/consumption
• Reinforcement learning
• Trial and error learning
• Shaping (behaviour changed by reinforcing the
  performances that show change in a desired
  direction)

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Classical conditioning

• Signs and colour coding (e.g. mailbox)

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The satiation effect

• Heavily used reinforcements lose power (satiation
  effect)
• Wearout in advertisement
• Desensitisation stimulus satiation

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Stimuli and reinforcement learning

• Continuous and Intermittent learning
• Continuous is quicker
• Intermittent has a larger final effect
• Extinction period after the end of reinforcement
  is longer for intermittent learning
• Example of reinforcers Kinder egg surprise, air
  miles, Tesco clubcard point, cashback

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Punishment and reinforcement learning

• Food poisoning consequences
• One failure is enough
• Undiscovered later improvements of the product
• Effect is long-lasting

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Reinforcement and marketing strategy

• Control stimuli to direct behaviour
• Reinforcers
• Pleasure
• Information
• Degree of opennes (range of activities
  available to the consumer)
• Environment affects behaviour

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The Habit paradigm

• While the cognitive and reinforcement paradigms
  are based on dynamics and change, the habit one
  is related to aggregate stable markets, where
  behaviour is seen as relatively unchanging.
• The habit paradigm excludes problem-solving or
  planning
• Judgment comes after purchase and habits may be
  broken

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The involvement factor

• Involvement
• Importance of purchase
• Risks involved
• Potential costs
• Irreversibility of the decision
• Type of cognitive process that is generated

Example beef consumption after the BSE crisis
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Frustration factor

• Frustration as blocked motivation
• No options are available
• Minor frustrations in using products may lead to
  change products
• New products should be designed to avoid
  frustration

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Managerial control and the purchase paradigms

• Cognitive paradigm
• Provide information and persuasion
• Suitable for one-off decisions
• Reinforcement paradigm
• Change the environment and stimuli
• Habit paradigm
• Packaging
• Advertising

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Problem/need recognition

• In general, individuals recognise they have a
  need for something when there is a discrepancy
  between their actual state and ideal state.

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Need recognition and marketing strategy

• Advertising
• In-store promotion
• Visibility

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Need recognition