It might seem a silly question to ask, because we all know that characters in fiction novels are exactly what they are – mere characters in fiction novels. So since they are fictional, is there a need to do anything more? After all, the readers already know they are not real.
Yes indeed there is a need to do more. There is a need to do more than just label them as characters. The key component of literary fiction is the characters. The plot alone does not make literary fiction what it is, it is the characters that give it that depth, their personalities, the actions they take, the decisions they make - that's what literary fiction is about. It's about the readers finding that point of connection between themselves and the character, seeing themselves in these fictional emblems, perhaps drawing strength from them, or learning a lesson from consequences of wrong actions taken.
As the writer of a literary work, you have to know who your characters are so as to better represent them when weaving the plot of your story. When a twist occurs in the plot, what would character A, the protagonist think to do, being the 'so-and-so’ kind of person that he is? Having gone through a déjà vu experience as the one that is about to happen in a particular plot, how would Character B react in this instance? How would he face his demons? These are examples of situations to put in mind when developing your character. Your characters, especially the protagonist/antagonist, are not simply cartoon characters or foils that can get away with anything; they have to be as real as can be. They have to feel real emotions, real inner turmoil, real pain, real laughter, real joy.
And so one way to get your character connection going and flowing, is to give each of them traits that you want to enhance, traits that are so ordinary and real, but extra-ordinary at the end of the day. Write a list of your main character’s likes, dislikes, passion, needs, temperament - is she shy? Is he stiff, or romantic? Is he conceited, is he humble? Is she lacking the trust gene, i.e, does she find it hard to trust? Why? What ticks him off, what makes him happy? How will they develop as the plot thickens? Will they get better, or worse? Will they appear stronger or more defeated at the end? Make up as much character traits as you want for your characters, and know them like you would get to know a close friend, or even a sibling. Get to know your characters; get to be your characters. Establish a bond with them, so that when you begin writing your work, you can easily tell what twist or turn to take that would make or break them, develop or bring them down, and your words will flow easily to merge your characters, your plot, settings, and all implemented elements together to bring forth an outstanding literary piece of work.
There's no better feeling for the reader than being able to establish a kinship with the characters. When authors succeed in accomplishing this feeling for the reader, it means they have mastered their characters like the back of their hands!
Know your characters, and know them well.