MN5006QA Consumer Behavior: Economic Model and Buying Decisions

This report explores the importance of consumer behavior models, focusing on the economic model and its influence on purchase decisions. It highlights reasons for using these models, including identifying target groups, retaining consumers, and predicting market trends. The economic model, emphasizing utility maximization, income effect, substitution, and price effect, is presented. A personal purchase example of organic yogurt is analyzed, considering health factors and disposable packaging. The report concludes by detailing the influences of the economic model on the yogurt purchase, such as price, substitution with natural products, and affordability.

Consumers behaviour
models

Table of Contents
TASK...............................................................................................................................................1
Importance of thinking about consumer behaviour models........................................................1
Consumer Behaviour Model: Economic Model.........................................................................1
Factors which influenced me to buy a particular product...........................................................2
Important influences of economic model on the purchase of yogurt..........................................2
References:.......................................................................................................................................4

TASK
Importance of thinking about consumer behaviour models
Below mentioned are the several reasons which explain why it is important to think about the
consumer behaviour models:
1. In order to identifying the target group of people, the marketers have to do consumer
differentiation and these models help them in making differentiation.
2. For the purpose of retaining the consumers, it is necessary to apply consumer behaviour
models.
3. Understanding the consumer marketing behaviour help the marketers to design the
marketing program.
4. It is necessary for the business organisations to predict the market trends for making
profit. Consumer behaviour model help the business in same (Cruz-Cárdenas and
Arévalo-Chávez 2018).
5. Consumer behaviour model help the business organisation in analysing the market
competition.
6. In order to making innovation successful, consumer behaviour model help the
organisation.
7. It also help the businesses in staying relevant.
8. It also leads to bringing improvement in the services of customers.
9. Consumer Behaviour model help the marketers to analyse the buying behaviour of
customers.
10. It is also useful in determining the exact requirements and bases of choice made by
customers.
Consumer Behaviour Model: Economic Model
It is the model which majorly focus on the action of purchase of average customers and
explain that what a buyer would buy in what quantity. According to economic model of
consumer behaviour model, consumers want to maximize the utility of product as per the law of
diminishing marginal utility (Hosta and Zabkar 2021). The customer want to gain the maximum
utility from the product by spending a less amount of money. The core of derivation of this
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model is consider as the amount spend on the purchase of products. This model is based on the
income effect, substitution and price effect.
Factors which influenced me to buy a particular product
I just made a purchase of organic yogurt from the store of Tesco. There I found yogurt of several
brands. I select an organic yogurt because of some influencing factors. Below mentioned are
some factors which influence me for buying the same: Healthy product: Organic product are found as healthy product to eat as include several
of nutrients and vitamins as compare to other products. All of yogurt may include some
chemical but this organic yogurt is made of natural products.
 Disposable packaging: The company of organic yogurt use disposable material for
packaging which do not harm the environment.
Important influences of economic model on the purchase of yogurt Price of yogurt: While the purchase of yogurt has been made, it has been analysed that
the price of organic yogurt is less than the other yogurt present in the store. Substitution: This yogurt is made from natural products (Khouja, Li and Zhou 2019).
There is no use of any artificial colour and taste in organic yogurt. While other yogurt
may include artificial taste and colour.
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 Income effect of customer: While purchasing yogurt, it has been found that the organic
yogurt can be afforded by the customer.
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References:
Books and Journals
Cruz-Cárdenas, J. and Arévalo-Chávez, P., 2018. Consumer behavior in the disposal of
products: Forty years of research. Journal of Promotion Management, 24(5), pp.617-
636.
Hosta, M. and Zabkar, V., 2021. Antecedents of environmentally and socially responsible
sustainable consumer behavior. Journal of Business Ethics, 171(2), pp.273-293.
Khouja, M., Li, Y. and Zhou, J., 2019. Nonlinear pricing for yield management and countering
strategic consumer behavior. Available at SSRN 3561185.
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