Consumers

Consumers are individuals or groups who purchase goods and services for personal use and not for manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements. Any time someone goes to a store and purchases a product, they are making that decision as a consumer.

Definition and Importance

In economics, the term "consumer" is used to describe a person who uses goods and services to satisfy their personal needs and not for resale or further production. Consumers play a vital role in the economic system of a nation. Without consumer demand, producers would lack one of the key motivations to produce: to sell to consumers. The consumer also forms part of the chain of distribution.

Consumer Behavior

Consumer behavior is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions. Marketers expect that by understanding what causes the consumers to buy particular goods and services, they can determine—by sifting through various factors—what is important to consumers and how they can influence their purchasing decisions.

Consumer Rights

The concept of consumer rights was first developed in the mid-20th century, based on the idea that consumers have certain rights as part of the buying process. These rights include the right to safety, to be informed, to choose, and to be heard. In many countries, consumer protection laws have been established to ensure consumer rights are upheld.

Consumer Protection

Consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade, competition, and accurate information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors. They may also provide additional protection for those most vulnerable in society.

Economic Impact

Consumers have a major impact on the economy. Their spending decisions directly affect economic growth, inflation, and employment. In a broader sense, consumer confidence acts as an economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.

See Also

• Consumer confidence index
• Consumer spending
• Consumer theory
• Market economy
• Demand