Consumers vs Customers – What’s the Main Difference?

Consumers vs Customers – What’s the Main Difference?

consumers and customerswhat are their main differences, and why do so many people mistake the two for each other?

When learning economic topics related to marketing and sales strategies, inexperienced business people can come across a lot of jargon that can give them headaches. The words consumer and customer are a prime example.

In daily life, people tend to use customers and consumers are interchangeable as they basically have the same meaning.

From an economic point of view, however, the two convey different messages, and each applies only to a specific situation.

What you need to know about consumers?

We believe that you have to keep in mind the general concept of what a word means from a marketing perspective.

For this reason, let’s look at the basic definition of the word “consumer” in this section and see its application in the field of marketing.

Definition of Consumer

Consumers are people who buy a product to meet their needs and make the most of it.

Individuals who are considered consumers do not resell products or services they purchased through monetary transactions. Instead, they consume a product for their own purposes.

In short, an individual who is the end user of any buying chain provided by a business would fall into the category of “consumer”.

Let’s take an example. Imagine you want to eat a dish and plan to cook yourself a delicious dinner. You head to a nearby grocery store to buy all the necessary ingredients, then go home to prepare your purchased dinner.

In this case you are called the consumer. You pay a certain amount of money to buy products from retailers to serve yourself. Not involved in resale for personal or organizational profit.

four kinds of consumers

Classification of consumer types is a useful measure for tailoring products to different consumption goals. There are four typical consumer types:

inferior consumer

These are the people with the lowest incomes. Most of them are engaged in manual labor and earn the lowest income.

Therefore, they have no choice but to choose the most affordable product on the market. And, if not for survival, they have little urge to buy anything.

extroverted consumer

Any consumer who prefers luxury goods from well-known brands will fall into this group. They are constantly updated with all the new upcoming products from popular brands and have the ability to buy them.

They often prove to be loyal and active consumers. When a brand wants to promote its product through a marketing strategy, the extrovert is clearly the best niche for an advocacy position (also known as a brand advocate).

discretionary consumer

They prefer a particular type of product or service and are not interested in any other business projects.Discretionary consumers show interest and spend money on specific products

As such, they tend to put most of their money into a single category with little thought of buying anything else.

For example, if they like jewelry and makeup, they will spend time finding and buying only makeup, earrings, and necklaces.

business consumer

As the name suggests, they prefer to buy things in bulk despite their current demand. Buying products in bulk tends to offer them lower prices, which further encourages their usual spending behavior.Commercial consumers often buy goods in bulk

What you need to know about customers?

After understanding the basics of the main word “consumer”, you may wonder how it differs from the word “customer”. To help you figure it out, we’ll explain the definition of “customer” and some related information.

Definition of Customer

When an individual, organization, or business purchases a product or service from a supplier through some form of currency exchange, they fall into the “customer” category.

In short, the customer is not the end user of the product. Instead, they contribute it to an ongoing chain of item exchange until the product finds its final consumer.

From this definition, it is clear that every consumer is a customer because they all have to buy a product in order to use it for its purpose.

Anyway, it doesn’t always work the other way. Sometimes, customers are not consumers.

For example, let’s say you go to the grocery store to buy some fruit. Since you are planning to visit your grandparents tonight, you decide to give them the fruit as a gift. So now, are you a consumer or a customer?

In this case, you are the customer because you bought the item yourself, but you are not called a consumer. The grandparents who end up enjoying the fruit will become the end users, making them consumers.

two types of customers

Like consumer types, people divide customers into different groups based on purchase purpose. They are divided into the following two main types.

trading client

Trade customers purchase goods or services for the original purpose of resale for additional cash.

Due to the nature of the trade, they often buy products in bulk from distributors or manufacturers at low prices and then resell them at higher retail prices.

So they just continue the buying chain, not the end user of the product.

final customer

The fictional scenarios we elaborated to you in the Definitions section are great examples of such clients. When you buy fruit from the grocery store for your grandparents, you become the end customer.

You do not buy fruits for transactional purposes, but provide them to consumers, thus ending the chain of purchase of the product.

Additionally, this customer type includes every consumer who buys a product for a personal need with no intention of profiting from resale.

What is the difference between customer and consumer?

After you have all the necessary information about your customers and consumers, you may have a better understanding of their application in the field of marketing.

In this part, we’ll dive into their differences. Also, there’s an overview graph at the end to easily give you the gist.

significance

A customer is anyone who buys a product or service. On the other hand, consumers are the end users of the buying chain, which means they are the ones who end up using the product for themselves.

Every consumer is a customer, but not every customer is considered a consumer.

Resale ability

When consumers buy something, they use the product entirely for its purpose without any resale to generate a profit. Therefore, they are also known as end users of the buying chain because they end up using the purchased items for themselves.

On the other hand, customers can choose whether or not to trade their purchases.

When buying something, business customers resell the product for a profit, while individual consumers don’t.

Buying Motivation

A consumer is a person who buys a product in order to use it.

The impulse of consumers to go to a retailer or store to buy something comes only from the need to consume.

However, in addition to consumption, customers may also want to purchase goods or services for resale.

Payment

Consumers may or may not be people who pay for goods through currency exchange. As long as you consume a product for your own needs, you are a consumer.

However, the customer must be someone who does currency transactions for the product.

Target groups

Everyone in this world is a consumer because we all have to feed ourselves physically and mentally to survive. However, not everyone has the ability to purchase goods through currency exchange.

Therefore, consumers can be individuals, families or companies of all ages, while customers are mainly financially able individuals and trading companies.

Children are consumers but not customers because they cannot pay for the goods themselves

Overview of consumers and customers

bottom line

This ends up being the end of our post comparing consumers to customers. We hope this post shed some light on the subject of obfuscation and provided you with some useful new information.

Consumers are the ones who ultimately use the goods according to their needs, while customers can choose to use or resell them for profit. Also, consumers may or may not pay for what they consume, but customers must pay for what they buy.

All in all, take care, we hope to see you in the next article.

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