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- This article is about consumers in economics. For the article about consumers in biology, see Heterotroph.
Consumers are individuals or households that purchase and use goods and services generated within the economy. The concept of a consumer is used in different contexts, so that the usage and significance may vary.
[edit] Consumer in economics and marketing
Typically when businesspeople and economists talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic profile and psychographic profiles of market segments, marketers are engaging in personalized marketing, permission marketing, and mass customization.
In economics, a consumer is assumed to have a budget which can be spent on a range of goods and services available on the market. Under the assumption of rationality, the budget allocation is chosen according to the preference of the consumer, i.e. to maximize his or her utility function. In 'time series' models of consumer behavior, the consumer may also invest a proportion of their budget in order to gain a greater budget in future periods. This investment choice may include either fixed rate interest or risk-bearing securities.
[edit] Consumer in law and politics
Within law, the notion of consumer is primarily used in relation to consumer protection laws. A typical legal rationale for protecting the consumer is based on the notion of policing market failures and inefficiencies, such as inequalities of bargaining power between a consumer and a business.[1] As just about everyone is a consumer, consumer protection also has a clear political significance.
In addition, concern over the interests of consumers has spawned much activism, as well as incorporation of consumer education into school curriculums. There are also various non-profit publications, such as Consumer Reports and Choice Magazine, dedicated to assist in consumer education and decision making.
[edit] See also
- Consumers' cooperative
- Consumer debt
- Consumerism
- Consumer theory
- Consumption
- Mass customization
- Coolhunting