Black Box Model

The black box model is a framework used to extract and predict consumer needs and offer insights into consumer behavior. This model assists in understanding consumer behavior, their buying process, and how they make purchase decisions.

The model is based on the theory that consumers are smart and rational and know what they want from a product. They can deduce their needs and requirements and make the right purchase decision. The answers to these questions are there in the consumer's mind. Businesses analyze this to provide the right product and ensure customer satisfaction. This model is also referred to as the stimulus-response model.

The black box model of consumer behavior defines the entire thought process and actions of a consumer in the market. It includes thinking, analyzing, comparing, and making the final purchase decision. Professor Geoffrey Jones developed the model at the Center of Market Studies, Cambridge University, and it was later revised by an Australian academic, Rodney Hitchin. The model suggests that a consumer's behavior is based on information and motivation and takes a buyer to be rational, a critical thinker, and a problem solver. 

The consumer black box model states that consumers relate to products based on their personal beliefs, values, desires, and other preexisting knowledge, which can be considered internal stimuli. By studying this model, one can observe how the external stimuli enter the consumer's mind and the responses that come out of it. These stimuli can include anything from a brand image, tagline, recommendation, a particular advertisement, or promotional strategy. 

There are three main stages of the black box model. 

1. Input - The input consists of external stimuli that trigger a consumer's mind (black box). They are of four main types: physical, social, commercial, and temporal.

• Physical denotes the product’s packaging and look.
• Social aspect includes any form of recommendation, advice, or suggestions from others.
• Commercial factor signifies the advertising and publicity of the product or brand.
• Temporal indicates the time constraints a buyer has regarding the purchase. 

2. Decision-making process - All these external stimuli meet the internal stimuli, and the decision-making process is initiated inside the consumer's mind. It is where the assessment of the product, alternatives available, safety, features, price, need, problem, information, experience, values, and emotions are measured in the context of the product. 

3. Output response - It is the last stage where the consumer finally responds after properly analyzing every aspect, factor, and stimulus based on their decision-making. These responses may vary from one buyer to another depending on their needs, attitudes, preferences, and specific requirements for the product.

Here are two examples to understand the concept better: 

Example #1

Suppose XYZ Inc., an automobile company, primarily manufactures high-end cars that signify luxury and social status. The company has its audience and makes annual sales with a reasonable revenue. However, the sales of such vehicles are low, and with time, they are declining. As a result, the company has experienced limited growth for a few years. The management decided to launch a new range of affordable cars to attract regular middle-class consumers. 

XYZ Inc. launched three simple cars that are high in mileage and have fewer luxury features but fulfill basic comforts and safety requirements. The designs are simple, the ground clearance is high, and the quality is supreme build quality. The company used the black box model, which views consumers as problem solvers, rational thinkers, and decision-makers. They know what they want in a car and will be able to rationally compare them immediately.

In the next quarter, sales skyrocketed because more consumers could relate to this series of cars than to the luxury ones. This is a straightforward example of this model in action. The company can use the same model to determine which of the three cars has the best sales and is adored by the customers.

Example #2

In another example, the black box model also called the stimulus-response model, has numerous applications in marketing and advertising campaigns. For instance, if a phone company hires a Hollywood actor or a social media celebrity to advertise and make them the phone's brand ambassador, it can significantly influence a broad audience. Some people might be inclined to buy the phone simply because their favorite celebrity endorses it. 

Another common trick is to use catchy slogans, create an emotional connection, and, more significantly, create advertising campaigns that instantly attract consumers. Most people like to buy products with premium packaging. It shows how internal and external factors influence the mindset of consumers.

The advantages of this model are listed below: 

• It explains how a consumer's decision-making process works.
• The model helps in extracting patterns, trends, and insights parallel to a buyer's mindset. 
• It concentrates on a consumer as a problem solver and thinker. 
• The model allows companies to understand how different factors influence a consumer or buyer in the market. 
• The framework is widely used in product launches, advertising campaigns, market strategies, and customer engagement. 

The disadvantages of this model are as follows: 

• The model assumes that one issue is related to everyone and one factor applies to every buyer. This means that it does not account for individual differences. 
• It is based on the assumption that consumers are rational. However, they often do not know why they bought the product in the first place. 
• The model is oversimplified. Not being complex means it does not have multiple levels and brings the whole assessment to a linear stimulus-response. 
• If a consumer does not know their black box, it poses both a threat and an opportunity for a marketer.