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The study of the subject consumer behavior enables marketers to understand and predict the behavior of a consumer at the market place. It is concerned not only with what consumers buy but also as to why, when, where, and how often they buy it. So, before embarking on further, it is essential for us to understand who a consumer is.
Definition of Consumer
Consumer is a broad term. Any person who uses a product or service or deals with it can be called a consumer. The term consumer may be defined as follows:
1. Philip Kolter and Gary Armstrong define consumers as
all the individuals and households who buy or acquire goods and services for personal consumption.
2. In the words of Ms. Raju
Consumer is a broad term and any person uses a product or service or deals with it can be called a consumer
The above definitions point out two types of consumers — namely,
- Personal consumers and
- Institutional consumers.
Personal consumers are individuals and households who themselves consume goods or services. Institutional consumers on the other hand are businesses, organizations and groups that buy and consume goods and services during the course of their operations.
Consumer and buyer
The term buyer is broader than consumer. A consumer is an ultimate buyer. Buyers can be classified into two major categories —
- Consumers; and
- Industrial buyers or business buyers.
So, an individual consumer buys for personal consumption. But a business buyer buys things for to manufacture various other products or to resell or for running of his enterprise.
Consumer vs Customer
The term consumer should not be confused with the word customer. A buyer or consumer becomes a customer when he/she regularly buys or consumes a product or service. A customer regularly visits a place of business or patronizes a product or service.
For example, a person sells tea-dust and he has just one customer — the owner of the restaurant who buys tea dust. On the other hand, all the persons who drink tea in the restaurant are consumers. Traditionally, the word customer was used to define people whom an organization dealt with externally. The term customer refers to the purchaser of a product or service.
They may or may not be the ultimate consumer. But the term consumer refers to the end user of a product or service. They may or may not be a customer.
Definitions of Consumer behavior
The term consumer behavior is defined as follows:
1. J.F. Engels defines Consumer Behavior as follows
“The activities and the action of people and organization that purchase and
use economic goods and services including the influence on these activities and actions.”
2. Leon G Schiffman, Lestie Lazar Kanuk
Behavior that consumers display is searching for purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.
3. P.K. Agarwal
Consumer behavior refers to all the psychological, physiological and social psychological reasons of individual consumer’s response to marketing appeals.
4. Philip Kotler
The field consumer behavior studies how individuals, groups and organizations select, buy, use and dispose of goods, services or ideas or experiences to satisfy their needs and desires.
Scope of Consumer Behavior
Everyone without exception is a consumer. So, the applicability of consumer behavior science is indeed universal. The increase in population and the ever-expanding choices and freedom make the study of consumer behavior a must for any marketing function.
Consumers consume food, clothing, shelter, transportation, education, equipment, vacation, necessities, luxuries, services and even ideas. Consumers play a vital role in the growth of an economy.
The purchase decisions of consumers alter the demand pattern for basic raw materials. They also influence employment of workers and deployment of resources. They even determine the success of some industries and failure of others.
Consumer behavior focuses on how individuals make decisions to spend their available resources on consumption related items.
Personal and Organizational Consumers
The term consumer behavior describes two kinds of consuming entities. They are
- Personal consumers and
- Organizational consumers.
A personal consumer buys goods and services for his own use, for the use of his household or as a gift for his friend. The products are bought for final use by individuals who are referred to as end users or ultimate consumers.
The organizational consumer, on the other hand, includes profit and non profit businesses, government agencies and institutions. They buy products, equipment and services in order to run their organizations.
Ways to find behavior of consumers
Marketers study the behavior of consumers and use the findings in three principal ways.
1. Consumer behavior enables the marketers to understand the rationale behind the behavior of consumers. Products and services are designed by marketers to meet the real needs of consumers.
2. Consumer research studies forecast the behavior and response of consumers to existing as well as proposed new products. They help build profiles of consumers who are likely to use the product.
3. Consumer behavior studies help to segment the market. Dividing a total heterogeneous market for a product or service into several segments enables marketers to formulate suitable marketing strategies. Marketers can address different consumer segments with different products and formulate suitable strategies.