What is a consumer?

A consumer is a person or organisation that uses economic services or commodities.

Consumer plays a vital role in the economic system of a nation, because consumer is the
one who pays something to consume goods and services produced therefore without
consumer demand, producers would lack one of the key motivations to produce.

Behaviour

The way in which one acts or conducts, especially towards others while human behaviour is
the capacity of mental, physical, emotional and social activities experienced together.
Human and consumer behaviour can be linked together.

Theory of consumer behaviour

According to Walters (1974 ;7) defines consumer behaviour “as the process whereby
individuals decide whether ,what ,when where ,how and from whom to purchase goods and
services” but Schiffman & Kanuk (1997;648) defined consumer behaviour as the behaviour
that consumer display in searching for purchasing using evaluating and disposing of
products ,services and ideas.

(Smiriti Chond) introduced nature of consumer behaviour being influenced by various factors
namely marketing factor such as product design, price, promotion packaging, positioning
and distribution. Personal factors such as age, gender education lastly the level of income.
Psychological factor such as perception of the product and attitude towards the product and
the level of motivation influence the buying behaviour of the consumer.

Social factors the society composes different individuals that have different preference and
different behaviours, this varied behaviours influence person image to perform activities
which is acceptable to the society.

Reference groups and family also plays role in once behaviour .The family influence the
individual through the personality, attitude, beliefs, and characteristics of the individual
whereby reference group influence the individuals because they are associated together as
the members of the group they share common buying behaviour and have a strong influence
over each other.

Cultural factor the individual learns this factor at an early stage of life due to socialisation of
the family such as beliefs and customs .subculture the geographic religion of an individual
lastly social class to which an individual belongs influences the buying decision.
Also economic factor is the major one influencing consumer behaviour this is a factor that
talk about the level of sale market and financial position of a consumer to how much the
individual is willing to spend on the purchase of goods and services looking on personal and
family income, also income expectations, consumer credit and liquid assets and savings
Utility approach

Economic concept that although it is impossible to measure the utility derived from a good or
services, it is usually possible to rank the alternative in their order of preference to
consumer. since the choice is constrained by the price and the income of the consumer ,the
rational consumer will not spend the money on an additional unit of good or services unless
it marginal utility is at least equal to or greater than that of a unit of another good or service
therefore the price of goods or services is related to its marginal utility and consumers will
rank his or preferences accordingly .while( Philip Mohr) the utility as tremor consumer
satisfaction .It expresses the degree of satisfaction that a house hold or consumer derives or
expects to dive from the consumption of a good or services lastly ()introduced the
measurements of utility which is in utile.

We have two different utility approach namely total and magma utility approach .the total
utility is the total satisfaction gained from consuming units of some particular goods where by
marginal utility is the additional satisfaction gained from consuming one more unit of the
good ,it falls as a consumption rises .Alfred Marshall explained the different utility which is
cardinal utility in which psychic properties are believed to be measured and quantifiable
while a theory of ordinal utility was later proposed that assumed consumers could rank the
desirability of goods without measuring the exact utility for each good.

Using this utility functions assist in decision making Example a small company is faced with
the prospect that one of its products will shortly be out competitor .It would be possible to
launch a crash program to develop a new version of the product that would be equal to
better than even chance that neither the company’s own new version nor the competitors will
receive significantly greater acceptance than the current model.
Indifference approach

Indifferent means that you have no preference for any combination of two goods while (P
Mahr et al 1996) says indifference approach was devised towards the end of the 19th century
by a famous Italian economist , Vilfredo Pareto (1848 -1923) and developed further by the
20TH century economist such as the Nobel Prize winner Sir John Hicks .The indifference
Approach has defined advantages over the traditional utility approach in analysing consumer
behaviour .Furthermore the indifference approach is based on three basic assumptions
namely the assumption of completeness where a consumer Is able to rank all possible
combinations (or bundles) of goods and services in order of preference .Second one named
the assumption of consistency simple means that consumers assumed to act consistently
.lastly the assumption of non-satiation states that consumers are not yet fully satisfied and
always prefer more or less .

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References

Walters, 1974 “Organizational Behaviour - Human behaviour at work”, 9th edition

New Delhi: Tata McGraw Hill.

Schiffman, L.G & Kanuke, L.L (1997). Consumer behaviour 6th edition .Upper Saddle
River, N .J: New Delhi: practise hall.

Smriti Chand, Market Segmentation.

http :www.markert segmentation /consumer behaviour

www.Business dictionary .co.za