The 3 Most Common Consumer or Customer Behavior Models

Vu Khoi

Author at Wotech Electronics Blog

Today, with the explosion of digital technology and the rapid development of all kinds of commerce, people can make purchasing decisions for themselves more easily than ever. Understanding the fundamental truth that people can never fully satisfy their own needs, manufacturers will always strive to create as many diverse products as possible to meet those needs — specifically, through consumer behavior models.

We may not realize that every action and decision we make when shopping is, to some degree, clearly reflected in our consumer behavior. Precisely because of that importance, the study of consumer behavior models has become one of the advanced theories increasingly put under research. Studying these behaviors helps businesses better understand the factors and characteristics that directly influence consumer buying behavior, and from there develop strategies for promoting the business's products.

What Is Consumer Behavior?

Simply put, the study of consumer behavior is the analysis of the psychological factors, motivations, behaviors, and habits that directly affect customers' actions, frequency, and priorities when choosing and consuming products and services. Some characteristics clearly reflected in consumer behavior include:

• How customers evaluate a brand or a particular product
• How customers compare different brands
• The external factors influencing consumer decisions and behavior
• How consumers approach advertising campaigns

The Philip Kotler Consumer Behavior Model

To evaluate the factors influencing consumer buying behavior, we must start by determining how their buying process begins and ends, and from there identify the agents that influence their decisions in order to build a consumer behavior model. It is no accident when a customer decides to walk to a store, stop at a product counter, pick an item off the shelf, and take a certain quantity of it. All those actions and decisions go through the following 5-step process:

• Step 1: Recognizing the need

This occurs when the customer becomes aware of a gap in what they want — from basic needs up to higher levels. In addition, the emergence of a need can also be influenced by external stimuli.

• Step 2: Searching for information

Once customers have identified their need, they will want more information about the thing they need. They can gather this through many different sources of information, such as TVCs, word of mouth, the internet, and so on.

• Step 3: Comparing

After finding information about the things they want, customers will evaluate and compare the information for those product categories. This is the crucial step that determines the product the customer chooses.

• Step 4: Buying

Although it seems simple, whether a customer decides to actually purchase an item they had planned to buy is governed by many different factors.

• Step 5: Evaluating the product

After buying and using, customers will reassess whether what they got from the product met their expectations. This also somewhat influences their later buying behavior, as it partly determines whether the customer stays loyal to that product.

From the steps above, we can consolidate the process of consumer behavior into the consumer behavior model presented by Philip Kotler in his book "Principles of Marketing." This is the most general and foundational model, and it can be applied to most different businesses.

>> See more: Why Study Customer Behavior? And How?

The Consumer Behavior Model Based on Maslow's Hierarchy of Needs

Another consumer behavior model that has been built and applied just as widely is the model based on Maslow's hierarchy of needs.

Maslow's hierarchy of needs is constructed from the most basic human needs. At the lowest level are ordinary physiological needs such as eating, drinking, breathing, and so on, rising level by level above. According to this model, we can easily recognize that consumers will tend to satisfy their basic physiological needs before wanting more advanced needs.

These important conclusions help guide us in building a consumer behavior model suited to each different type of company. In particular, the consumer behavior model built on Maslow's hierarchy of needs is especially suitable for multi-category businesses, as it links product lines into a chain, facilitating both trading and management.

The Consumer Black Box Model

The black box model, also known as the stimulus-response model, is a model that reflects an individual's decision-making based on their own thinking as well as external influences.

Simply put, the consumer behavior model shows how stimuli are transformed within the consumer's black box through two parts. One shows how the business's external stimuli affect the customer's mind, and the other shows how they process those sources of information within their black box before making a specific purchase decision.

The consumer black box model can be applied in many different ways. With the development of science and technology — big data platforms and artificial intelligence — black box models can be combined with complex quantitative methods to help research deeper problems. Whereas this model was once considered suitable only for small retail channels, today investment funds and hedge funds are also gradually applying the black box model to manage their business strategies.

The Factors Influencing Consumer Buying Behavior

Each different type of customer has different characteristics and needs, and this leads to different buying decisions. From a marketer's perspective, to maximize revenue, they need to set out strategies for each specific customer audience in order to reach them effectively. There are 4 main macro factors that influence consumer behavior, and within those 4 macro factors there are many smaller ones:

Cultural Factors

• Country, territory: Each country and region has its own distinct identity, which somewhat influences people's lifestyle and way of thinking.

• Customs, beliefs: Factors leaning toward religion and belief always have a profound effect on how people view an issue or phenomenon, and from there influence consumer behavior in many different directions.

Social Factors

• Class and status: These factors somewhat influence consumers' income as well as their notions about how to use money and choose products, thereby determining their consumer behavior.

• Law and politics: In each different country, the laws and political institutions differ and somewhat govern people's actions in those places, even affecting consumer behavior.

Personal Factors

• These are the factors most easily capable of steering consumer behavior. Differences in tastes, personality, or simply gender, age, occupation, lifestyle, and so on will make each person's purchasing decisions different.

Psychological Factors

• Desires and motivation: How much a person craves and is determined in their thinking and actions also changes their behavior.

• Knowledge: Knowledge itself comes from observing and accumulating experience. So over the long term, those experiences gradually form in us a way of thinking that directly influences the actions we display — even our consumer behavior.

• Attitude: Attitude can be seen as how we respond to an event or phenomenon, expressed through a tendency to act. Thus, based on their attitude toward a product, customers will exhibit corresponding consumer behaviors.

From Consumer Behavior to Business Strategy

Studying consumer buying behavior models is not a simple task, so a business needs to devote a great deal of time and effort to maintaining the research. However, the value it delivers is enormous. In short, whether customers trust you, use your products, and will always support you depends on how you influence their consumer behavior.

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