Consumer vs Customer

Consumer vs Customer is a quite common analysis which is often done because people often get confused in between the two terms and interchangeably use them. However, understanding the difference between customer and consumer is quite important to understand their separate roles in the economic ideology of consumerism.

The very basic difference between customer vs consumer can be understood with their obvious definitions-

Consumer Vs Customer

Consumer Definition

A consumer refers to an individual who consumes a product or service.

Customer Definition

A customer is someone who purchases a product or service.

Here you should also understand that a consumer can or can not be a customer, as inclinations and interests of consumers can influence the buying decisions of customers.

Let us delve into the world of both- customer and consumer separately to understand the difference-

Who is a Consumer?

The consumer is the one who consumes the product or enjoys the services or the end-user. Consumers are the group of people who are the user of the goods.

An entity that doesn’t possess the option of reselling the product after purchase. The intention of the purchase is the final consumption of the product. The end-user in the life cycle of a product can be termed as a consumer.

For instance, an individual who buys milk for his/her kid is a customer of the milk brand. However, during the time of consumption, the kid who drinks that milk is a consumer of that milk brand.

Who is a Customer?

A person who buys the product or service from the market is considered to the customer. Customers are the group of people that buys the goods or services.

For instance, if we consider the aforementioned example again here, a mother buying milk to feed her infant. Here, the mother is the customer, and the infant is a consumer.

The common link between customers and consumers is that the brands have to impress them to influence them to buy a product. First, the customers are lured by the brands. Unless the customers buy, the product consumer cannot consume the product.

The main motive of the brands is to entice the customers to buy the product. Once, the consumers get impressed by the product’s quality then; he will convince the customer to repeat the purchase.

Remember, the cost of acquiring a new customer is five times more than that of retaining an old one.

Here, it is also important to understand that in the analysis of customer vs consumer, it is the consumer whose preferences can also influence the decision of a customer. Therefore, brands need to pay heed to both.

Let us discuss different types of customer and consumer-

Types of Consumers

There are four types of consumers that are as followed:

1. Discrete type

All of the consumers under this category have a discrete buying method. They consider spending a good chunk of money on a few particular items of their liking. For instance, Jewellery, cosmetics, and apparel. They will throttle their spending on other categories to even things out.

2. Inferior Goods type

The consumers under this category have a tight budget to manage all their expenses. The status of their income is low. Hence, the goods required for survival are consumed by individuals.

3. Commercial type

The consumers under this category have an ulterior motive of buying goods in bulk. The use of the products can or cannot be used for commercial purposes, but the purchase is in bulk quantities is certain.

4. Extrovert type

The consumers under this category all have a liking towards branded products. These consumers are the most loyal consumers who don’t shift brands quickly. If the product is out of stock in the market, they usually wait for the product to come in stock rather than buying a new brand’s product.

Types of Customers

1. Final Customers

These are the end-users of any goods or services available in the market. The intention behind the purchase should always be self-consumption. The life cycle of the product ends when it reaches the hands of the final customers. The products are not bought with the motive of reselling them to gain profits.

2. Resell Customers

These are the ones who buy a product intending to resell the product further. The life cycle of the product doesn’t end here. Retailers, wholesalers, trade consumers, and manufacturers belong to this category.

Difference between Customer and Consumer

Customer and consumer terms are frequently used interchangeably, so let us understand their differences on different grounds-

Customer vs Consumer Analysis

1. Definition

Customer – An individual who is paying the price and buying the goods or services from the brands. So, in customer consumer analysis, the customer makes the purchase. Customer may also use the same product

Consumer – The end-user of the product or service is termed the consumer. The consumers can or cannot be the ones buying the product, but ultimately the consumer is the one who uses the goods or services.

2. Reselling capacities

Customer – Customer the person can have the intention of reselling the product to earn profits.

Consumer – Consumers never have the intention to resell the goods further to earn a profit, consumers use the product finally for their personal use.

3. Purchase requirement

Customer – Customers are the ones who pay the money and secure the goods or services. The customer may or may not use that product.

Consumer – A consumer doesn’t need to buy a good or service. This means, in these two categories, consumers are those who can or cannot pay to secure the goods or services.

4. Buying a motive

Customer – The motive of the customer can be either to resell for earning profit or consumption to satisfy the needs.

Consumer – The motive of consumers is always to consume the good to satisfy their needs.

5. Is Payment mandatory?

Customer – The customers bear the cost to secure the good or service.

Consumer – The consumer doesn’t need to pay for the service.

6. Target Group

Customer – Companies or Individuals

Consumer – Family or Groups or Individuals

Why Customers and Consumers are so important?

In life, there always comes a time when we ask ourselves who is more important for a business- customers or consumers.

An economic chain can never exist without anyone. Consumers or customers purchase the product or service and use it from different brands. – And that is why a business makes different strategies to meet with their target audiences.

Though the difference between both is of great significance, they (customers and consumers) are equally important. Let us have a look at some of the reasons that suggest why a business should take proper care of their buyers and users-

1. Consumer goods increase demand

Consumer goods have many famous industries like the FMCG (Fast-moving consumer goods) sector. The shelf life and the replacement of the FMCG products are rapid in the stores. – And customer and consumer add value to this process, or you may say they are the backbone of this process.

2. Balance in the Demand-Supply graph

Any economy needs to strike an ideal balance between the product’s supply and demand. The consequences of imbalance can be a recession, unemployment, etc. So, customers and consumers complete the cycle of economies by consumption.

3. Augmentation of demand

All goods and services in the world are borne to fulfil the market’s demand. The root cause of the production of products and services is to satisfy demand. Different segments of consumers have various tastes and preferences. The demand for the product is what motivates the manufacturers to produce the goods.

4. Development of service divergence

Consumerism is not restricted to the food and beverage industry, but the concept is enormous. Service industries like the grooming, transport, pharmacy, communication, and education industry all contribute to the country’s GDP. All the sectors and industries are linked with each other in a vicious cycle. The approach of the service industry involves negotiation rather than control or order.

Wrapping Up!

Now, on the concluding note, we hope you would have understood how consumers are different from the customers.

All in all, a person who purchases is a customer, while a user who consumes a product or service is a consumer. The customer may or may not be the user but a consumer will always be the user of the products or services.

How would you describe the roles of a customer and consumer?