The study of consumer's choices during searching, evaluating, purchasing, and using products and services that they believe would satisfy their needs
Marketing
The activity, set of institutions, and processes for creating, communicating, and delivering offerings that have value for customers, clients, partners, and society
Consumer behavior reflects the totality of consumer's decision process in the acquisition, consumption and disposition of product and services
Consumer behavior does not merely involve the way people buy their daily needs
Consumer behavior involves the use of services, ideas, and activities that consumer's experience in their daily life
Our behavior as a consumer reflects the choice of the TV programs according to our preference and attends sports activity that is our individual lifestyle
The changing landscape in consumer behavior needs careful analyses as most companies in the whole business community is shifting to the development of quality products that is affordable to most consumers
Marketers are trying to get the bigger share of the market pie by trying to understand the changing consumer behavior
Marketing organizations are trying to serve better the customers and get ahead of the other players in the field of business
Importance of Studying Consumer Behavior
Effective Marketing Strategies
Product Development
Customer Satisfaction and Loyalty
Resource Allocation
Utility
The want-satisfying ability of a good or service
Economists rate utility in utils on a scale from 0-10, 0 meaning the least useful or satisfying and 10 meaning the most useful of satisfying
Law of Diminishing Marginal Utility
As a consumer uses up a good or service, they tend to get less and less satisfied with it through time. The greatest satisfaction is experienced by consuming the first quantity of the said good.
Total Utility
The overall happiness derived by a consumer with regard to their consumption of a product
Marginal Utility
The additional utility (satisfaction) gained from the consumption of an additional product
Budget Line
A graphical representation of the amount of good's price and the buyer's income
Indifference Curve
A line illustrating a consumer's responsiveness or indifference based on a combination of two products (X and Y)
