Unit 4: Consumer decision making
Consumer Behaviour notes · PTU syllabus (MBA 921-18)
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Unit summary
Marketers model how consumers decide and how new products spread. This unit covers the consumer decision process and models — Howard–Sheth, Nicosia and Engel–Blackwell–Kollat — the opinion leadership process and profile of opinion leaders, and diffusion of innovations and the adoption process.
After this unit you can
- Explain the consumer decision-making process
- Explain the Howard–Sheth, Nicosia and EBK models
- Explain the opinion leadership process and profile
- Explain diffusion of innovations and the adoption process
PTU syllabus topics
- Decision process and models (Howard Sheth, Nicosia, Engel-Blackwell-Kollat)
- opinion leadership process and profile
- diffusion of innovations and adoption process
Nicosia model
Firm-consumer communication loop
Advertising to purchase
Howard-Sheth model
Inputs, perception, learning, outputs
Brand choice
Engel-Blackwell-Kollat
Five-stage decision process
Problem recognition to post-purchase
Topic 1
The consumer decision process
- 1Need recognition
Gap between actual and desired state
- 2Information search
Internal memory and external sources
- 3Evaluation of alternatives
Compare brands on attributes
- 4Purchase decision
Brand, store, quantity, timing, payment
- 5Post-purchase behaviour
Satisfaction, repeat purchase or cognitive dissonance
Cognitive dissonance is post-purchase doubt ("Did I make the right choice?"); marketers reduce it with reassurance, warranties and follow-up. Types of buying behaviour: complex (high involvement, big differences), dissonance-reducing, habitual and variety-seeking.
Topic 2
Nicosia model
- Francesco Nicosia (1966) models the flow of communication between the firm and the consumer in four fields.
- 1Field 1
Firm's message (advertising) shapes consumer attitude
- 2Field 2
Search and evaluation of the product
- 3Field 3
Act of purchase (motivation leads to purchase)
- 4Field 4
Feedback — consumption experience to consumer and firm
- Strength: shows interaction between firm and consumer; weakness: focuses on new products and is hard to test empirically.
Topic 3
Howard–Sheth model
- John Howard and Jagdish Sheth (1969) explain brand choice under limited information.
Inputs (stimuli)
Significative (product), symbolic (advertising), social (family, groups)
Hypothetical constructs
Perceptual (attention, search, bias) and learning (motives, choice criteria, brand comprehension, attitude, confidence, intention)
Outputs
Attention, comprehension, attitude, intention, purchase
Exogenous variables
Importance of purchase, personality, social class, culture, time and financial pressure
- Problem-solving levels: extensive, limited and routinised response behaviour.
Topic 4
Engel–Blackwell–Kollat model
- EBK (1968), later Engel–Blackwell–Miniard (EBM): a comprehensive model of the decision process.
- 1Problem recognition
- 2Search
Internal and external
- 3Alternative evaluation
- 4Choice (purchase)
- 5Outcomes
Satisfaction or dissonance, feedback
- Influences: information input (marketing and other stimuli), information processing (exposure, attention, comprehension, acceptance, retention), environmental influences (culture, class, family, situation) and individual differences (resources, motivation, knowledge, attitudes, personality).
Nicosia
Firm–consumer communication loop
Role of advertising and feedback
Howard–Sheth
Brand choice and learning
Levels of problem solving; inputs and constructs
EBK
Complete decision process
Information processing and environmental influences
Topic 5
Opinion leadership process and profile
Opinion leadership is the process by which one person (the opinion leader) informally influences the attitudes or actions of others (opinion seekers or receivers). Opinion leaders are credible, knowledgeable, socially active and often heavy users in their product category. Marketers target them with samples, previews and influencer programmes.
Role
Gives advice and information
Asks for advice
Knowledge
High in the category
Lower
Media use
Heavy, specialised
General
- Theories of the process: two-step flow (media → opinion leaders → followers), multi-step flow (information flows in many directions), interpersonal flow.
- Profile of opinion leaders: high product involvement and knowledge, heavy media exposure, innovativeness, social activity, similar social status to followers; market mavens know about many product categories.
- Digital opinion leaders: influencers, YouTubers, reviewers.
Topic 6
Diffusion of innovations
Diffusion is the process by which an innovation spreads through a social system over time (Everett Rogers). Elements: the innovation, channels of communication, the social system and time. Product characteristics affecting diffusion: relative advantage, compatibility, complexity, trialability and observability.
Topic 7
The adoption process
- 1Awareness
Learns of the innovation
- 2Interest
Seeks information
- 3Evaluation
Considers whether to try it
- 4Trial
Tries it on a small scale
- 5Adoption (or rejection)
Decides to use it regularly
Topic 8
Adopter categories and consumer innovators
- Innovators
2.5% — venturesome, risk-takers
- Early adopters
13.5% — respected opinion leaders
- Early majority
34% — deliberate
- Late majority
34% — sceptical
- Laggards
16% — traditional
Consumer innovators tend to be younger, better educated, higher income, more interested in the product category, more venturesome and heavier media users.
Key terms
- Routinised response behaviour
- Habitual buying with little search
- Nicosia model
- Model of firm–consumer communication in four fields
- EBK model
- Comprehensive model of the consumer decision process
- Two-step flow
- Media influence passing through opinion leaders
- Diffusion
- Spread of an innovation through a social system
Quick revision
- Decision process: need, search, evaluation, purchase, post-purchase.
- Nicosia (4 fields), Howard–Sheth (inputs, constructs, outputs; EPS, LPS, RRB), EBK (process and influences).
- Opinion leadership: two-step and multi-step flow; profile; influencers.
- Diffusion: innovation, channels, social system, time; product characteristics.
- Adoption stages; Rogers' adopter categories.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is post-purchase dissonance?
- Q2.Name the four fields of the Nicosia model.
- Q3.What are hypothetical constructs in the Howard–Sheth model?
- Q4.What is the two-step flow of communication?
- Q5.State the product characteristics that affect diffusion.
- Q6.Name Rogers' adopter categories.
Long-answer questions
- Q1.Explain the consumer decision-making process.
- Q2.Explain the Howard–Sheth model of consumer behaviour.
- Q3.Compare the Nicosia and EBK models.
- Q4.Explain the diffusion of innovations and the adoption process.
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