Everything about Consumers totally explained
» This article is about consumers in economics. For the article about consumers in biology, see Heterotroph.
Consumers refers to individuals or
households that use
goods and services generated within the
economy. The concept of a consumer is used in different contexts, so that the usage and significance of the term may vary.
Consumer in economics and marketing
A consumer is a person who uses any product or service. Typically when business people and economists talk of
consumers they're talking about
person as consumer, an aggregated
commodity item with little
individuality other than that expressed in the buy/not-buy decision. However there's a trend in
marketing to individualize the concept. Instead of generating broad
demographic profile and
psychographic profiles of
market segments, marketers are engaging in
personalized marketing,
permission marketing, and
mass customization.
In
free market or
capitalist economies, consumers are presumed to dictate what goods are produced and are generally considered the center of economic activity. Individual
consumption of goods and services is primarily linked to the consumer's level of
disposable income, and budget allocations are made to maximize the consumer's
marginal utility. In 'time series' models of consumer behavior, the consumer may also
invest a proportion of their budget in order to gain a greater budget in future periods. This investment choice may include either
fixed rate interest or risk-bearing
securities.
Consumer in law and politics
Within law, the notion of consumer is primarily used in relation to
consumer protection laws, and the definition of consumer is often restricted to living persons (for example not corporations or businesses) and excludes commercial users. A typical legal rationale for protecting the consumer is based on the notion of policing market failures and inefficiencies, such as inequalities of bargaining power between a consumer and a business. As potential voters are also consumers, consumer protection takes on a clear political significance.
Concern over the interests of consumers has also spawned much activism, as well as incorporation of consumer education into school curricula. There are also various non-profit publications, such as
Consumer Reports and
Choice Magazine, dedicated to assist in consumer education and decision making.
Further Information
Get more info on 'Consumers'.
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