Consumer modeling girish mude

Consumer Modeling

Prof. Girish MudeMAEER’s MIT School of Management, Pune

girishmude@mitsom.com

Consumer Modeling

• Model is very often referred to as an abstract representation of a process of relationship.

• How they help:– In development of theories– To understand complex relationship– Provide framework for discussions and research

Girish Mude MITSOM, Pune

Lets study Models then….

Models

Models in consumer Behavior

• Psychoanalytical model• Economic model• Sociological model• Howard Seth model• Nicosia model• Engel Blackwell model• VALS2 Stadford model

The psychoanalytical model

The psychoanalytical model draws from Freudian psychology

Individual consumer has a complex set of deep seated motives which drive him towards certain

buying decisions.

The buyer has a private world with all his hidden fears, suppressed desires and totally subjective

longings.

His buying action can be influenced by appealing to those desires and longings.

According to Mr. Freud, human

personality has three parts

namely,

1. the “ID”, the source of all

mental energy which drives one

to an action.

2.the “Super Ego”, the internal representation of

what is socially approved—one’s

conscience.

3. the “Ego”, the conscious director of ‘ID’ impulses for finding satisfaction

in socially acceptable manner.

In other words, ‘ID’ represents one’s animal or basic impulses, ‘instincts’ and cravings for immediate and total satisfaction.

Marketers have been using this Approach to generate new ideas for developing product- design, features, advertising and promotional techniques.

Example…

A person is interested in buying SONY TV with characteristics of Hi-black Trinitron Screen—super drum sound system say Rs.1,05,000 with remote control.

Here his ‘ID’ demands the use of consumer credit liberally to buy that costly T.V. set.

The Super Ego dissuades him from heavy borrowing as credit beyond certain limits is not acceptable.

Here the Ego acts like a mediator and comes with a fine compromise of installment system without away strains and drain on his financial position.

Here self image of a consumer is a great motivating force inducing him to buy certain products.

Economic Model

It is assumed that man is a rational human being.

Evaluate all alternatives in terns of cost and value received.

Select that product/service which gives maximum satisfaction (utility).

With limited purchasing power consumer will allocate their expenditure over different products.

Consumer intention to maximizing

utility/benefit.

Economic Model is based on certain

prediction of buying behaviour

Sociological ModelIndividual buyer is part

of society. Gets influence by it. Play many roles

As a family

member

As an employe

As a member of professiona

l forum

Influence by

Family

Friends

Close colleagues

Peer group(Informal Leader influence)Girish Mude MITSOM, Pune

Nicosia Model

Developed b Francesco M. Nicosia in 1966

Attempts to establish linkages between the marketing firm and its consumer.

The essence is how the activities of the firm influence the consumer and result in his direction to

Nicosia Model ..Continued

• His model lumps these activities into Four basic fields.• Field One has two sub-fields namely, the firms attributes and the

consumer attributes. An ad message from the firm reaches consumer’s attributes. Depending on the way the messages received by the consumer, a certain attribute may develop and this becomes the input for the field Two.

• Field Two is the area of search and evaluation of the advertised product and other alternatives. If this process results in a motivation to buy, it becomes the input for field three.

• Field Three consist of the act of purchase. • The field Four consists of use of the purchased item. There is an

output from field Four --- feed back of sales results to the firm

Engel, Kollat, and Blackwell (EKB) Model

The EKB model is comprehensive and shows the components of decision making and the relationships and interactions among them.

The five distinct parts of consumer decision making presented are:•Input, information processing, a decision process, decision process variables, and external influences

One of the important features of the Engel, Kollat, and Blackwell model is the description of consumer purchasing as a process comprised of several stages rather than a single act of buying or not buying.

•Our experiences, contact with others•Marketer-controlled stimuli (e.g., advertising, store display, demonstrations)•Other stimuli (e.g., personal recollections, conversations with friends)•External search

Input includes all kinds of

stimuli from our contact

with the world around

Information Processing

Stimuli are processed into

meaningful information

Five methods of

information processing:

Decision Process

It is triggered at any time during

information processing

It consists of five steps:

Decision Process Variables

Those individual qualities that

make people/consumer

s unique.

Decision process

variables include

External Influences

Such influences are called “Circles of Social Influence.” They are: culture, sub-culture (co-culture), social class, reference groups, and family or household influences

This model is an individual decision process model since it views a single consumer as the basic decision making unit. The model does recognize influences from other people, but the central focus is still on the individual.

VALS2 Stadford model

VALS-2 was developed by the US consulting firm Stanford Research Institute (SRI) as an improvement on its original VALS (introduced in 1978), a system that divided people into three basic lifestyle groups (Need driven, Outer directed, and Inner directed).

VALS 2 (VALUES AND LIFESTYLES SYSTEMS) -- Basic Categories

• Principle - oriented: guided by their view of how the world should be

• Status - oriented: guided by actions and opinions of others

• Action - oriented: guided by desire for social or physical activity,

variety, risk-takingGirish Mude MITSOM, Pune

VALS 2: Available Resources Relevant to Psychographic Profiles

• Education• Income• Health• Energy Level• Self Confidence• Degree of Consumerism

Fulfilleds

Believers

Actualizers

Achievers

Strivers

Strugglers

Experiencers

Makers

AbundantResources

MinimalResources

Values and Lifestyles 2 (VALS 2)(Stanford Research Institute)

Principle-Oriented

Status-Oriented

Action-Oriented

• Eight basic lifestyle groups on the basis of two dimensions: resources and self-orientation.

• Resource dimension includes education, income, intelligence, health, energy level, and eagerness to purchase resources that, in general, increase from youth to middle age decline afterwards.

• Self-orientation is divided into three parts (1) Principle oriented: having set views. (2) Status oriented: influenced by other's thinking. (3) Action oriented: seeks activity, adventure, and variety.

• The eight basic lifestyle groups are (1) Actualizers, (2) Fulfillers, (3) Believers, (4) Achievers, (5) Strivers, (6) Experiencers, (7) Makers, and (8) Strugglers.

• VALS2 used self-orientation to capture three different ways of buying for the lifestyle classifications.

• Principle-oriented consumers (fulfilleds and believers) were grouped based on their views regarding how the world is or how it should be;

• Status-oriented consumers (actualizers, achievers, strivers, and strugglers) were grouped based on their view regarding the actions and opinions of others; and

• Action oriented consumers (experiencers and makers) were grouped based on a desire for social or physical activity, variety, and risk-taking (Riche, 1989).

Any Questions ???

Thank You !!!

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