CONSUMER BEHAVIOUR
KEY POINT:-MEANING
-CONSUMER BEHAVIOUR APPROACHES)
*ORDINAL APPROACH (INDIFFERENCE CURVE)
*CARDINALS APPROACH (UTILITIES)
- CONSUMER PREFERENCES
- FOCTORS INFLUENCING CONSUMER BEHAVIOUR
- DEFINITION AND ASSUMPTIONS (TWO COMM(X,Y),Px,Py,AND Y
- BUDGET LINE AND INDIFFERENCE CURVE
- THE BUDGET EQUATION
- OPTIMAL CHOICES OF GOODS / CONSUMER EQUILIBRIUM
- INDIFFERENCE MAP
- SHIFT IN BUDGET LINE (DUE TO CHANGE OF PRICE AND INCOME)
* EFFECT OF PRICE CHANGE (SUBSTITUTION EFFECT _PCC)
* EFFECT OF INCOME EFFECTS (INCOME EFFECTS YCC)
* LIMITATION OF THEORY
CONSUMER BEHAVIOUR
Meaning
A CONSUMER: is a person or household that buys a final product for use.
CONSUMER BEHAVIOUR: is a study of how individual customers, groups or organizations select,buy , use,
and dispose ideas,goods and services to satisfy their needs or wants.
Understanding consumer behaviour is a key element of market strategy. In fact before implementing a
strategy it is essential to fully understand the needs and expectations of the consumers you want to
influence.
Categories of consumer behaviour
-complex buying behaviour
-habitual buying behaviour
-Variety seeking behaviour
- Dissonance-reducing behaviour
CONSUMER BEHAVIOR APPROACHES
* Ordinal approach/ indifference curve: is a graph showing a combination of two goods that gives a
consumer equal satisfaction and utility.
REQUIREMENTS TO STUDY ORDINAL APPROACH
# PREFERENCE OF TWO COMMODITIES (X,Y)
# EXISTANCE OF TWO COMMODITIES (X,Y)
# DEFINED BUDGETY
# PRICE AND QUANTITY X
# PRICE AND QUANTITY Y
BUDGET LINE: