In Java, variables are used to store data values. Java provides different types of variable data types such as int, float, double, char, boolean, and many more. However, sometimes these pre-defined data types may not be sufficient to represent all the data needs of a program. In such cases, Java allows programmers to create their own custom data types by defining classes.

A class is a blueprint for creating objects. It defines the properties and behavior of the objects that will be created from it. When we create a class, we are defining a new data type that can be used to store data and perform operations on that data.

Defining a custom class allows programmers to control the data being manipulated by creating their own properties and methods. For example, if we were creating an application that deals with students, we could define a custom class called "Student" that would have its own properties such as name, age, and grade. We could also define methods for the Student class, such as "calculateGrade" which would calculate the grade of the student based on their assignments, exams, and other factors.

By defining custom classes, we can create more efficient and effective programs that are tailored to our specific needs. It also makes our code more modular, allowing us to reuse the code we've written for our custom classes in other parts of our program. This ability to create our own custom data types is one of the key strengths of Java and is one of the reasons it is such a popular programming language.