Daniel shares tips with other entrepreneurs, after more than 10 years experience developing and maintaining successful businesses.
Types of Consumers
In business terms, there are different types of consumers of goods and services that are offered for sale by companies and manufacturers. So, why is it important to understand different types of consumers and how to reach them?
A product manufacturing company needs to understand the type of consumers it is targeting with its goods because it is essential to be confident a market exists for the products they intend to introduce into the market.
Knowing the types of consumers for goods enables a company to appropriately present the product to the potential purchaser, hence increasing sales and profitability.
Understanding the type of consumers who purchases your products can help you make a diverse range of decisions including:
- Product design (including cost)
- Product placement
- Promotions (type and timing)
- Production schedules.
There are different types, classes or categories of consumers of goods and services and in this article, each of them will be discussed to help you understand the difference.
Many consumers purchase and consume products on a seasonal basis. They shop at certain times when the need for them arises.
Cash flow for a business selling seasonal products can be very difficult. Long periods of the year may be without sales, so it is vital to quickly and effectively target seasonal consumers.
Some Products That Rely on Seasonal Consumers:
- Umbrellas during the rainy season
- Cold or icy drinks during the hot seasons
- Christmas trees and decorations in December
- Beach wear in summer
These types of consumers are individual consumers who purchase goods for the sole purpose of personal, family or household use.
- Going to the supermarket and shopping for goods which are to be used in the house
- Purchasing a car that you intend to use personally
- Purchasing clothes for personal use from a clothing mall
- Purchasing a mobile phone for personal communication
Have you ever wondered why cameras and internet connections were added to cell phones? It is hard to imagine any individual who would not be eager to take photos and share them with their personal contacts and friends.
Manufacturers selling products to personal consumers are constantly looking for ideas for upgrades and add-ons to enhance the appeal of their goods to individuals.
Organizational consumers purchase products for organizations, governments or businesses. They often buy in bulk and may place long-term recurring orders. For this reason, an organizational consumer is generally highly prized and sought after.
Products and services sold to organizational consumers are often required to meet very strict standards. They may need to be adapted to meet the specific requirements of the buyer, and specific prices are negotiated.
Manufacturers and service providers who target organizational consumers are expected to be flexible in their approach to negotiating a sale, but rigid in maintaining quality.
Goods may be offered for resale at a profit to the organizational purchaser. Or an organization may buy raw materials that are aimed at producing other goods which will later be offered for sale to other consumers.
Impulse buyers are consumers who make unplanned buying decisions.
Impulse buyers make swift buying decisions and immediately purchase when they 'connect' with the product and its features. There is often some kind of emotional appeal.
Products impulse consumers purchase are not initially in their plans, so product placement is very important. Manufacturers who target impulse buyers need their goods to be featured prominently in a store.
- Chocolates near the check-out counter
- Cookies at eye level on the shelf
- Bright, eye-catching novelty items where children can spot them
Service providers can also target impulse buyers, often by offering significant discounts or immediate service.
Need-based consumers are those types of consumers who buy goods and services when they need them and not any other time. Many of the products in a hardware store, for instance, are sold to need-based consumers.
A need for a certain product will necessitate buying it because it is needed immediately for a certain purpose. The challenge for marketers is to create a sense of 'need' to promote the sale of products and services.
- Paint when a wooden house needs to be protected from the weather
- Light bulbs when we need to see at night
- Heaters or air-conditioning if we need to be comfortable in our homes
Life insurance sales increase if we are convinced we need to be sure our families are taken care of if we die.
Discount-driven consumers are the type of consumers who purchase goods and services primarily for the discounts on offer. They may not engage in any buying activity until they hear or see large discounts being offered on products they like.
Discount-driven buyers are price sensitive and would rather wait to purchase products when they come with discounts as opposed to when they are sold for full price.
Coupons and stock-take sales are popular with this type of consumer.
An increasing number of manufacturers, retailers and service providers offer discounts during recessions or harsh economic climates.
Habitual consumers are those who feel compelled to use certain brands or types of goods.
Marketers work hard to create brand loyalty among this type of consumer. It may be as simple as always choosing the same brand of deodorant, the same brand of soda, or shopping in the same store for groceries or clothes.
Cigarettes and alcohol are classic examples of products that target habitual consumers. A beer drinker can be expected to always buy the same type of beer, and smokers have been known to leave a store and go to a different sales outlet if their brand of cigarette is not available.
Advertising often encourages a persona associated with a specific product to appeal to habitual consumers.
It's Like Understanding Your Audience
Developing a better understanding of the people who pay to purchase your products and/or services will help you to target them more effectively, and actively meet their needs. In the process, your business will grow.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2011 Daniel Long
Ijaz Ahmed on April 07, 2020:
Thanks for providing suitable solutions, its very easy to understand written in simple language.