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Theory of Consumer Behavior: There are two main approaches to the of consumer behavior of demand. The first approach is the Marginal Utility or Cardinalist Approach. The second is the Ordinalist Approach. We discuss these two approaches separately. Cardinal Utility Analysis: Human wants are unlimited and they are of different intensity. The means at the disposal of a man are not only scarce but they have alternative uses. As a result of scarcity of recourses, the consumer cannot satisfy all his wants. Continue reading. Total Utility and Marginal Utility: People buy goods because they get satisfaction from them. This satisfaction which the consumer experiences when he consumes a good, when measured as number of utils is called utility. Continue reading. Law of Diminishing Marginal Utility: The law of diminishing marginal utility describes a familiar and fundamental tendency of human behavior. The law of diminishing marginal utility states that, “as a consumer consumes more and more units of a specific commodity, the utility from the successive units goes on diminishing”. Continue reading. Law of Equi Marginal Utility: In the cardinal utility analysis, the principle of equal marginal utility occupies an important place. We state the assumptions of the law first and then proceed to explain it. Continue reading. Derivation of the Demand Curve in Terms of Utility Analysis: Dr. Alfred Marshal was of the view that the law of demand and so the demand curve can be derived with the help of utility analysis. Continue reading.

Consumer behavior essentially refers to how and why people make the purchase decisions they do. Marketers strive to understand this behavior so they can better formulate appropriate marketing stimuli that will result in increased sales and brand loyalty. There are a vast number of goods available for purchase, but consumers tend to attribute this volume to the industrial world's massive production capacity. Rather,