Consumption
Consumption comes with word ‘consume’. In economics, consumption is related to the consumers of business. So, who are the consumers? What do they do in a business? And most importantly, why?
A consumer is a person who purchases the product produced or obtains service provided from a supplier with the intention of paying them. Everyone in this world is considered a consumer, because in our daily lives, we pay for the food we eat, the things we buy and so on. So these ‘activity’, is called consumption. In a business cycle, consumption is always the last part.
A consumer is a person who purchases the product produced or obtains service provided from a supplier with the intention of paying them. Everyone in this world is considered a consumer, because in our daily lives, we pay for the food we eat, the things we buy and so on. So these ‘activity’, is called consumption. In a business cycle, consumption is always the last part.
Why do consumers buy?
People buy not just because they think they should buy; there are many other reasons too. Some reasons are very good enough, some are sort of ridiculous. But no matter what, they will still be at least one reason that makes them want to buy the product. So, to success in a business, it is important to understand your target customers’ wants and needs, and sometimes you just have to imagine that you are a customer of your own business, and think like them. However, do not think in a too simpler way, think more about it, think differently and critically. Later, connect everything that you have thought together. In this way, you may even produce something that consumers do not even know they actually want it. This is why business should always be creative and innovative, that is one of how you attract customers.
Below are several major reasons that a consumer buys a product from a company.
Below are several major reasons that a consumer buys a product from a company.
Needs
First and foremost, needs are the very main and common reason of why we buy stuffs. It is also very easy to understand. For example, you need to keep in touch with a friend living far away from where your home, therefore you need a cellphone, so you buy it from a cellphone supplier. Generally, when talking about needs, the first thing we should consider about is the basic needs that keep us alive, such as food. People need food everyday to gain energy to work.
First and foremost, needs are the very main and common reason of why we buy stuffs. It is also very easy to understand. For example, you need to keep in touch with a friend living far away from where your home, therefore you need a cellphone, so you buy it from a cellphone supplier. Generally, when talking about needs, the first thing we should consider about is the basic needs that keep us alive, such as food. People need food everyday to gain energy to work.
Price and Value
Let’s take the previous example, you have decided to buy a cellphone but there are so many suppliers in this world and they are selling at different prices. To choose which supplier, customers would always compare the prices. Some want to know which one is more worth buying, some want to see if they can afford the price. People often mix up price and value. They are actually two different things. Price is the amount of money required for a payment for a product, while value relates to the usefulness and the worth of a product. For example, you found two suppliers of cellphones. One is multifunctional; another one is only usable for calling. Both cellphones are selling at $500, so which one is more worth buying? Which one has the highest value? Of course is the multifunctional cellphone! Because with $500 you can enjoy so many functions of the cellphone compared to the other one.
Let’s take the previous example, you have decided to buy a cellphone but there are so many suppliers in this world and they are selling at different prices. To choose which supplier, customers would always compare the prices. Some want to know which one is more worth buying, some want to see if they can afford the price. People often mix up price and value. They are actually two different things. Price is the amount of money required for a payment for a product, while value relates to the usefulness and the worth of a product. For example, you found two suppliers of cellphones. One is multifunctional; another one is only usable for calling. Both cellphones are selling at $500, so which one is more worth buying? Which one has the highest value? Of course is the multifunctional cellphone! Because with $500 you can enjoy so many functions of the cellphone compared to the other one.
Trends
Some people do not actually care about the price. They buy something because everyone else buys it too. For example, you have two options to buy a Chemistry reference book. One is published by Oxford, another one is published by Mackaen. All of your classmates bought the one that is published by Oxford, very naturally you would also consider buying the same as your classmates too! This ‘phenomena’ happens everywhere around us. It is more about the personality of a customer, whether he or she wants to follow the trends, because most people do not wish to be left behind. However, trends could be a threat to some business.
Another example is the vintage clothing trends in Malaysians, especially among the teenagers. It is believed that this trend started when the Korean Pop Music become very well-known to everyone in this world. Those teenagers like imitating the styles and fashion of those Korean Idols.
Some people do not actually care about the price. They buy something because everyone else buys it too. For example, you have two options to buy a Chemistry reference book. One is published by Oxford, another one is published by Mackaen. All of your classmates bought the one that is published by Oxford, very naturally you would also consider buying the same as your classmates too! This ‘phenomena’ happens everywhere around us. It is more about the personality of a customer, whether he or she wants to follow the trends, because most people do not wish to be left behind. However, trends could be a threat to some business.
Another example is the vintage clothing trends in Malaysians, especially among the teenagers. It is believed that this trend started when the Korean Pop Music become very well-known to everyone in this world. Those teenagers like imitating the styles and fashion of those Korean Idols.
Why do consumers buy from YOU?
There are several simple reasons why customers buy from YOU rather than your competitor.
A consumer buys a product from a business, rather than buying from others, is because he or she finds that the company benefit them more. In other words, sometimes consumers buy not because of the product, but it is the solutions a business offers and the advantages they can get from the business, that attract them to buy.
- Your product is the best solution of their problems
- They trust you
- You offer better customer services
- Your product and service are more advantageous to them
- You are the first company they find
- Your company is the nearest and easiest to get there
- Your product’s selling price is the lowest
- Etc.
A consumer buys a product from a business, rather than buying from others, is because he or she finds that the company benefit them more. In other words, sometimes consumers buy not because of the product, but it is the solutions a business offers and the advantages they can get from the business, that attract them to buy.