Consumer Preferences

Have you ever wondered why you like Coca-Cola but you have a friend that would beg to differ? Or maybe how you could never have tea over coffee but your decaffeinated friend will spend extra bucks for an iced tea? This is what we call consumer preferences.

Consumer preferences is the subjective tastes of individuals, measured by the amount of satisfaction they receive from consuming an item. This satisfaction is called ‘utility’. So the value of a commodity can be found out by comparing the utility that consumers get from it with the utility of other commodities or products.

While consumer preferences is defined as being ‘subjective’, it might not always be the case. These preferences are also influenced by factors such as social environment and peer pressure among others. For example, you might prefer to buy a Samsung smartphone, but instead choose to buy an iPhone so you can facetime your friends. Or you might end up buying a brand of shoes your favourite sportsperson wears.

Why is consumer preferences so important?

While you may not have thought much about it, but for businesses, whose income depends on consumer purchases, it’s the holy grail of marketing.

The consumers don’t really boggle much about why they would prefer certain commodities over another, but it’s an entirely different story for businesses and marketers. For marketers it’s about finding out what makes that black sofa better than a yellow one. This example is obviously flawed. I mean, who even likes a yellow sofa? But in other cases, it is their job to find out what makes the consumers prefer certain features/aspect of a commodity over others. This helps them to design their products to meet the demands of customers and employ marketing strategies to maximise their sales.

Coming back to the Samsung phone vs iPhone example, some may prefer an iPhone because it’s easy to use and seemingly idiot-proof. But others may prefer the Samsung phone because of the wider range of functions and operational freedom it offers.                                                

                                                 

But consumer preferences are not absolute. Not everyone can actually afford to buy what they prefer the most. I would most definitely like to buy a luxurious and expensive car, but constraints such as lack of digits in my bank account balance would restrict me from doing so. Lack of access can also cause consumers to settle for products that they don't really prefer. Other things that might prevent consumers from buying what they prefer might be poor customer support from the brand, unpopularity of a product among the consumer's social circle, strict conservative parents, among others.

Conclusion

Microeconomic theory assumes that all consumers are rational in their choices. In practicality, it’s quite different. Almost all of the consumption choices of individuals are affected by their tastes and preferences, sometimes overruling logic. For this very reason, marketers are concerned with consumer preferences and spend a great deal of resources to that end.