CONSUMER BEHAVIOR THEORIES
Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and the whole society.
It blends many elements from sectors such as psychology, sociology, social anthropology, marketing and finally, economics. It makes an attempt to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behavior.
An example of these theories is the Black box theory of behaviorism, where the focus is not set on the processes within a customer, but the relation between the stimuli and the response of the customer.
The marketing stimuli in this case are planned and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society. The buyer’s black box contains the buyer characteristics and the decision process, which determines the buyer’s response.
There are two approaches to the theory of consumer behaviour in relation and demand in economics. The first approach is the Marginal Utility or Cardinalist Approach whereas the second is the Ordinalist Approach.
In the Cardinalist Approach, we learn and see that human wants are unlimited and they are of different intensity. The means at the disposal of a man are not only scarce but they have alternative uses. As a result of scarcity of resources, the consumer cannot satisfy all his wants.
In the concept of Utility, “Utility” is defined as the power of a commodity or service to satisfy human want. Utility thus is the satisfaction which is derived by the consumer by consuming the goods. The utility is subjective in nature and differs in individuals.