Consumer behavior or consumer decision making is the subjective evaluation of the relative benefits and costs to be traded for various goods and services. It is not just a matter of personal consumer choice but also affected by impersonal social forces like reputation, social norms and influence. The contemporary theory on consumer attitudes towards marketing therefore attempts to describe the process by which consumers make choices regarding the marketing of a product or service. It is theoretically based on two main premises – that consumer preferences change over time and that marketing attempts to modify these preferences. The first assumption is called the diminishing marginal utility law and the second assumption is called the indifference curve.
According to the diminishing marginal utility law, demand for some goods declines while other increases. It is the law of demand and supply in economic theory. The assumption of supply is called the law of demand and the first law shows that when demand falls, prices also fall to a level which makes profit impossible. So when the consumers feel that they are getting something for less than they’re paying price, they will reduce their expenditure and increase their saving. This reduces the elasticity of demand and so unemployment increases.
The second assumption of modern thoughts on consumer behaviour is that consumer attitudes towards marketing may change over time. This is called the indifference curve and it shows that over time, market leaders and followers develop different views about what is not good for consumers. Thus, companies that adopt popular ideas, for example, may find themselves eclipsed by a new firm on price, output and quality. The third assumption is a corollary to the first two – that the public mood develops over time. The assumption of a changing public mood therefore implies that consumer behaviour also changes over time.
It is true that contemporary” zeitgeist” ideas, for example, that “the customer is always right,” have been around for many years. But this does not prove that contemporary consumer behaviour is permanently determined by these ideas. And it should be noted that these ideas, at least to some extent, are outmoded by the more fundamental aspects of consumer behaviour. They remain popular with sections of the public for a very short time, but eventually they lose their support.
So it seems that changes in consumer behaviour are more related to economic conditions rather than the personal attitudes of the customer. But the analysis presented here is more complex. To construct an easily comparable analysis, any set of descriptive data can be used. A more complex procedure requires knowledge of the nature of each industry and the variations within it. The same goes for any industry-wide changes, including those resulting from political events.
There are some things that are constant, irrespective of the prevailing economic situation. Consumer attitudes towards marketing, for example, remain largely favourable even in times of economic hardship. But there are certain changes that do occur. One example is that in recent years the attitude towards advertising has changed, with some companies choosing to avoid the direct approach and advertise through indirect means such as television and the internet. At the same time, some companies have redoubled their marketing effort through aggressive campaigns on the radio and in newspapers.
Other changes in consumer behaviour reflect the general trend toward convenience. This may result in increased use of electronic devices that require increased amounts of personal attention, for example, computer usage. Some consumers deliberately use more cash as a means of shopping more conveniently, for example, by selecting cashmere card deals. Such factors are of interest to researchers interested in understanding customer behaviour.
In summary, there are many reasons why consumer behaviour can change. Some are linked to changing economic conditions. Some changes that are inherent in consumer behaviour. But the main driver of behaviour change is the desire to use or receive services or products more conveniently.