Get Full Essay Get access to this section to get all help you need with your essay and educational issues. Get Access An Introduction to Consumer Behaviour Essay Sample This introduction to consumer behaviour will provide the background information necessary for the study of consumer behaviour, with regard to its nature, definition, development, consumer decision making processes, research methods, market segmentation and relationship marketing. Through this it will explore the characteristics of consumer behaviour and the major concepts in the study of consumer behaviour. In an ever- changing environment, the study of consumer behaviour will adapt and change, however this paper aims to provide an overview that may be considered the timeless history in theories about consumer behaviour.
Essay on Consumer Behaviour: Introduction to Consumer Behaviour: Microeconomic theory tends to assume that individuals are the economic agents exercising the act of consumption, the decision to purchase goods and services.
The consumer is assumed to choose among the available alternatives in such a manner that the satisfaction derived from consuming commodities in the broadest sense is as large as possible. This implies that he is aware of the alternatives facing him and is capable of evaluating them.
We assume that each consumer or family unit has complete information on all matters pertaining to its consumption decision. A consumer knows precisely what his money income will be during the planning period.
The 19th century economists, namely W. Stanley Jevons, Leon Walras and Alfred Marshall came up with the cardinal theory of consumer behaviour. They considered utility is measurable just as the weight of objects. The consumer is assumed to possess a cardinal measure of utility when he is able to assign every commodity, a number representing the amount or degree of utility associated with it.
Under this theory, it is possible to measure marginal utility MU of a commodity, whereby by MU we mean a change in utility due to a change in per unit of consumption of a commodity. This means as a consumer keeps on consuming successive units of the same commodity, consumption of other commodities held fixed, marginal utility diminishes.
Total utility increases at a decreasing rate for successive units of consumption of a particular commodity.
Assumptions of Consumer Behaviour under Cardinal Theory: Total utility can be expressed as sum of utilities pertaining to each commodity separately. For example, let utility be a function of two goods x1 and x2, i.
Mathematical Derivation of Consumer Behaviour: Let U x be the utility from commodity X whose price is Px. Hence, utility can be maximised by finding optimal indicating consumption bundles. Economic Interpretation of FOC: Suppose that an individual purchases 1 unit of x.
At the optimum these two must be equal, i.
Alternatively, we may give another type of economic interpretation of such an optimality condition. Suppose that an individual spends one additional unit of money on x.
Ultimately, the consumer incurs sacrifice of utility. Hence once optimality has been reached, it is always possible for the consumer to find the optimal demand function. For many economists in the last century, the assumptions on which the theory of cardinal utility was built were very restrictive.
According to the ordinal theory, utility is no longer a measurable concept. What is required is the existence of a preference base such that an individual can rank the consumption bundles according to his preference ordering. The ordinal theory of utility is based on the following axioms of preference ordering: An individual can rank these bundles in the following mutually exclusive ways: Strict Convexity of Preference Ordering: There exist a set of points in the consumption space which divides it into less preferred and more preferred areas such that these points are indifferent to one another.
Once these assumptions or axioms are valid, it is easier to show consumer preferences in a commodity space as in Fig. Due to the axiom of non-satiation it is observed that consumption bundle, XPY X has more of x2 than Y for the same x1. The remaining two zones, viz.Consumer Behaviour: Module 1 Introduction: • Needs are the essence of Marketing Concept.
• The key to a company’s survival,profitability & Growth in a highly competitive market place is its ability to identify and satisfy unfulfilled consumer needs better & sooner than their competitors. • Effective Marketing firm requires insights into consumer’s mind in order to succeed.
An Introduction to Consumer Behaviour Essay Sample. This introduction to consumer behaviour will provide the background information necessary for the study of consumer behaviour, with regard to its nature, definition, development, consumer decision making processes, research methods, market segmentation and relationship marketing.
In the highly specialised study of "BUSINESS MANAGEMENT", "BUSINESS ADMINISTRATION" or just "MANAGEMENT" today, "MARKETING MANAGEMENT" function plays a very critical role. In the consumer decision-making process, we have to consider the stimulus-response model, where marketing stimuli and environmental factors have an effect on consumer behaviour and characteristics which in combination leads towards the purchasing decision process finally responsible for the purchase.
Basic psychological aspects help us to. An Introduction to Consumer Behaviour Essay Sample.
This introduction to consumer behaviour will provide the background information necessary for the study of consumer behaviour, with regard to its nature, definition, development, consumer decision making processes, research methods, market segmentation and relationship marketing.
Consumer behaviour is the study of all the processes implicated when individuals, groups of people or organizations select, purchase, use or dispose of products, services, experiences or ideas to satisfy their needs, wants and desires (Salomon et al. ().