Models of Consumer Behaviour

Week 2 Consumer Behaviour and Food Marketing

Models of Consumer Behaviour

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

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

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

Important purchases
Product purchased for the first time Infrequently purchased products
Time and effort to choose Little experience High involvement

Going to a new restaurant Choosing the menu for an important dinner

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

Involuntary consumption
Unavoidable consumption
Petrol for the car Telephone Repair of roads (social form, public goods)

Choice between brands? Tap water

Group consumption
Purchase based on some group influence process
Family expenditures Company purchases

Mineral water

Purchase paradigms, theories and models

Paradigm (perspective, framework) Theory

MODEL

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?

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

Purchase paradigms
Are not mutually exclusive Subjective preferences Appropriateness for particular conditions

Purchase paradigms
1. Cognitive paradigm (US)
Purchase as the outcome of problem-solving

2. Reinforcement paradigm (UK)

Purchase as learned behaviour

3. Habit paradigm
Pre-established pattern of behaviour

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]

Cognitive paradigm
Does it work? Typical purchase (especially for food)
Few alternatives Little external search Few evaluative criteria

Engel, Blackwell and Miniard (1995)

Extended Problem Solving

New and important purchases
Problem/need recognition Search for information Evaluation of alternatives Purchase Consumption Post-consumption evaluation

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

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

Satisficing behaviour (Simon, 1957; Klein, 1989)

Need recognition

Evaluation of single Option NO Purchase? YES END

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]

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

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)

Classical conditioning
Signs and colour coding (e.g. mailbox)

The satiation effect

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

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

Punishment and reinforcement learning

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

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

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

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

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

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

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.

Need recognition and marketing strategy

Advertising In-store promotion Visibility

Need recognition