Consumer Behavior – Essay Example
Consumer behavior focuses on the thoughts and behavior of buyers when they make a purchasing decision. There are two categories of customers: those, who buy for themselves or their family consumption, and industrial customers that purchase for businesses. In both cases, the marketing specialist has to deal with the practical needs of a buyer or organization and his/her emotional and personal needs.
The importance of motivation in consumer behavior is known around the world. Over the past 30 years, there was a large and rapid progress in consumer behavior research. Consumer behavior is an activity, which is aimed primarily at the use and disposal of products and services, including the decision-making processes that precede these actions and follow them.
Nowadays, the range of goods and services for consumption is exceedingly large, and the consumer’s choice depends primarily on the needs, tastes, habits, traditions, and preferences.
Consumer preferences – is recognition that some goods are better than the others. Consumer preferences are, of course, subjective. The assessment of the usefulness and benefits of each selected product is also subjective. However, the choice of the consumer is not determined only by his or her preferences, it is also limited by the price of alternative products and the income of the consumer. Unlimited customer’s needs and limited resources make the consumer choice necessary.
When we consume different amounts of the same benefits, we notice that the more benefits we consume, the less satisfaction we get from consuming an additional unit of these goods. In theory, this pattern is called the law of diminishing marginal utility. It is the amount of added value of one additional unit of the good. This law involves the relation between the increase in the amount of goods consumed and additional useful unit of that good.
Thus, it is possible to state some principles of consumer behavior in the market, as there is a certain model of their behavior. Consumer behavior is rational, as it proposes certain objectives and is guided by self-interest. When the customer is selecting the goods, he or she is also limited by the budget constraint.
Model of consumer behavior is unrelated to general principles of consumer behavior in the market, including, above all, maximization of the total utility, the law of diminishing marginal utility and budget constraint. The above model of consumer behavior is the simplest model. However, it is also useful as it explains the buyer’s behavior on the market and the factors that influence the demand for goods.