Economic Influence on Consumer Behaviour
Definition:
Economic influence refers to the impact of a consumer’s financial situation, income, and
economic environment on their buying behaviour.
Importance in Consumer Behaviour:
● Determines purchasing power and product choice.
● Helps marketers segment consumers based on economic status.
● Influences demand for products and services.
Key Economic Factors Affecting Consumer Behaviour:
1. Income Level:
○ Higher income allows purchase of premium products; lower income focuses
on necessities.
2. Economic Conditions:
○ Inflation, recession, and economic growth affect spending patterns.
3. Price Sensitivity:
○ Consumers may switch brands or delay purchases due to price changes.
4. Employment Status:
○ Job security and occupation influence consumption decisions.
5. Wealth and Savings:
○ Availability of disposable income affects willingness to buy non-essential
products.
Applications in Marketing:
● Pricing strategies based on target consumer income.
● Designing affordable product lines for price-sensitive segments.
● Timing promotions during economic booms to maximize sales.
Definition:
Economic influence refers to the impact of a consumer’s financial situation, income, and
economic environment on their buying behaviour.
Importance in Consumer Behaviour:
● Determines purchasing power and product choice.
● Helps marketers segment consumers based on economic status.
● Influences demand for products and services.
Key Economic Factors Affecting Consumer Behaviour:
1. Income Level:
○ Higher income allows purchase of premium products; lower income focuses
on necessities.
2. Economic Conditions:
○ Inflation, recession, and economic growth affect spending patterns.
3. Price Sensitivity:
○ Consumers may switch brands or delay purchases due to price changes.
4. Employment Status:
○ Job security and occupation influence consumption decisions.
5. Wealth and Savings:
○ Availability of disposable income affects willingness to buy non-essential
products.
Applications in Marketing:
● Pricing strategies based on target consumer income.
● Designing affordable product lines for price-sensitive segments.
● Timing promotions during economic booms to maximize sales.
