Published by MBA Skool Team, Published on August 03, 2017
For any business to grow it is very important to understand the difference between a customer and a consumer. In most cases, the customer is the consumer but there are several cases where there is a remarkable difference between the two. And this becomes very important for businesses to understand. Understanding the key differences between a customer and a consumer can help companies have better strategies, better communication, streamlined marketing activities etc.
Who is a customer and a consumer?
Firstly, let us understand who is a customer and who is a consumer. Customer is any individual or entity who purchases a product from a seller. Customer is a person or intermediary between a seller and an end user. Customers purchase products and services from the sellers, and can be the end users. On the other hand, consumers are those who consume or use the products or services. Hence, any person who purchases a product or service is a customer and those who use these are the consumers.
How are Customers and Consumers Different?
Customer is an individual who seeks to fulfil a certain need of his or her by making a purchase relevant to him or her. In most cases, a customer is the one who uses the product or service in the end and end up becoming a consumer of these goods. This is because a person understands his or her need, their own requirements, their purchasing power, spending habits etc. Hence, a customer purchases any product which they find fit to fulfil their own needs and end up using the same, and hence become the consumers themselves.
However, in certain cases customers are not the consumers. This happens especially in cases where the products are related to infants, kids or elders. Infants and elders cannot go to the market or shop to buy certain goods which are needed by them. In this case, even though they are the end consumers they are not the customers as someone else buys it on their behalf. The parents of a child or the children of elderly people are the customers who buy products on their behalf. This shows the slight difference between customers and consumers which exists in the market.
Examples of customers vs consumers
1.A mother goes to market to buy items for her infant. Products such as nappies, baby oil, baby powder, infant food etc is for small children. But they cannot go to a supermarket or grocery to buy these even though they are the end users. Hence, the mother or father of a small infant or child becomes the customer and buys it so that the child's needs can be fulfilled.
2.Recharging a mobile phone for an elderly couple is also an example one can think of. Elderly people use their phones to make calls regularly. However, they are not to comfortable in going to a retailer or going online and recharging their prepaid simcards or paying their monthly bills online. In this case, the young kids of the elderly parents take the responsibility of ensuring that their mobiles stay recharged and their bills are taken care of. Thus the kids become the customers who do that transaction on behalf of their elders, who are the end consumers.
3.Similarly, buying toys or color books etc for consumer "kids" is done by customer "parents". Also, buying a new mobile handset, online shopping etc is done by customer "kids" on behalf of their consumer "elders".
4.Buying a gift for a friend is another example which shows the difference between customer and consumer. An individual goes to a shop and buys a wrist watch for his friend's birthday. The friend who buys the watch is the customer as he has done the transaction with the seller. Once he gives the gift to his friend, it is the friend who will wear the watch, and hence is the end consumer.
Hence, this highlights that this phenomenon of customers vs consumers is present in everyday business. A lot of companies ensure that their marketing activities are aligned with this fact so that they can attract customers into buying products and services for their family or friends, who are the consumers. Mostly industries involved in products for infants and elders or related to technological products & services have this differentiation between customers and consumers. Companies often have their advertisement and marketing campaigns made in such a way that they cater to both the customer and consumers, and that it tempts them to make a purchase of the same.
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