What are Consumer Preferences?
We find various types of people living around us and
sharing the same community and friends, but many a times, on comparing our
lives we notice a difference in the way they live- their tastes and inclination
for certain material goods in life. These are driven by Consumer Preferences.
So, what exactly are we talking about here? What do you mean by consumer
preferences? Consumer Preferences explain the tendency of a consumer to want
one good over another. This could be explained easily via the fact that
consumers derive more happiness and satisfaction from the use of this
particular good over any other available to them in the market. These
preferences and choices differ from person to person due to many reasons like
their habits, the way they were brought up or even something as simple as the
fact that they are easily influenced by catchy advertisements which draw them
towards the brand.
The People and their Choices
Let us consider a woman in a store, who may have a
choice between a wide range of perfumes available, but she would choose her
favourite Gucci perfume which she has consistently used for many years. On the
other hand, supposedly, a man looking out for a good scent may choose to buy a deodorant
because it better suits his needs and makes him feel good as well. This would
mean that they derive more satisfaction from this particular product than any
others they see in the market. This satisfaction is measured in the form of
‘Utility’ derived from consuming goods and helps a consumer make a smart
decision about the products they buy, pertaining to the tastes and habits they
have grown up with, which makes them happier. Utility is usually measured in terms
of cardinal utility and is a very subjective matter and differs from person to
person.
Taking the same woman along with us to a store where a
Chanel Perfume collection is being sold at the same price as one single Gucci
perfume. At this point this woman gives it a good thought and considers the
fact that she likes Chanel almost as much as Gucci and decides to buy the
Chanel collection. We don’t need to think about why because more is more and
who doesn’t want more? This clearly shows us how when choosing between two
bundles of goods, a consumer will always choose the bundle which gives them
more satisfaction and in this case of indifference between the two goods, drove
the woman to buy more perfumes at the same price because they would yield more
satisfaction and I mean, how can we ignore the great deal at hand!
Conclusion
It seems safe to say that consumers always want goods
which give them the most satisfaction and always prefer the bundles which offer
more to them than the other bundles. They consume these goods till the last
unit of the good which helps them reach the peak of their satisfaction before
they stop using it and if they find a good which is almost as good as the one
they strongly prefer, they feel a sense of indifference between the two.
Consumer Preferences are often said to have been used
to make the most optimal choices because everyone assumes that human beings
make very rational choices when it comes to making decisions about themselves!
But there may be times when an impulsive shopper may make an irrational
decision according to the rest of the world, but to them it might be a rational
decision because it makes them happy or provides a fulfilling feeling to their
mind. Satisfaction or utility are subjective concepts which differ from person
to person due to the different emotional tastes they have developed over a
period of time.
