Friday, August 3, 2018

How utility leads consumer buying behaviour

As you know consumer behaves rationally which means they do the cost benefit analysis and choose their favourable product.
But rationality also have a boundary where they can't choose the product because of lot of option and each having different benefits.
Consumers taste and preference also different. People’s need some satisfaction and it leads to the consumption activity to the concept of utility came into existence in economics

Utility - utility of a product means a product which is having some value of usability for a time.

When a consumer thinks about purchasing he keeps that utility of product in his mind. But there are certain assumptions to support the utility according to economists.
1. Taste and preferences are fixed
2. People allocate their income to maximize their satisfaction or total utility.

But now these exemptions are not relevant because due to the introducing of new players frequently in market the quality and taste of the goods and services are changing and people also trying this and changing their choice and preference.

Rational people think at margin allocates is resources to get the basic needs for then after that he wants to fulfill the demands and wants and think about the satisfaction.

No comments:

Post a Comment

IMPACT OF SOCIETY /SOCIAL GROUPS ON PURCHASE INTENTIONS OF HOME BUYING- Consumers are the most important factor that will make any bus...