buying power

Examples of buying power in the following topics:

• Consumer Income, Purchasing Power, and Confidence

  • A consumer's buying power represents his or her ability to make purchases.
  • The economy affects buying power.
  • For example, if prices decline, consumers have greater buying power.
  • If the value of the dollar increases relative to foreign currency, consumers have greater buying power.
  • When inflation occurs, consumers have less buying power.

• General Economic Conditions

  • These fluctuations in economic conditions affect supply and demand, consumer buying power, consumer willingness to spend, and the intensity of competitive behavior.
  • Unemployment is low, consumers' buying power is high, and the demand for products is strong.
  • Unemployment rises and consumer buying power declines.
  • Because of reduced buying power, consumers become more cautious, seeking products that are more basic and functional.
  • Unemployment increases, buying power decreases, and all other economic indicators move downward.

• Family

  • Interaction between spouses and the number and ages of children play a particularly powerful role on buying behaviors.
  • Another aspect of understanding the impact of families on buying behavior is the family life cycle.

• Positioning Bases

  • For example, two people are interested in buying a new car; one wants a car that is powerful and stylish while the other buyer is looking for a car that is reliable and safe and yet they buy the same exact car.
  • Customers often buy on a want, rather than a need, impulse.

• Types of Buying Decisions

  • Buying decisions are based on buyer behavior.
  • Consumers will often buy on emotion or impulse whereas businesses will buy based on need.
  • Because consumers often buy on emotion, ads can affect the buying decision.
  • Sometimes the type of product will make a difference in the buying decision.
  • This is why companies can influence what type of car a person will buy, but not when they will buy one.

• Trade Allowances

  • A manufacture sells to a retailer at a certain price unit point and beyond that point you give them a discount because they are buying in bulk.
  • For instance, hairdressers can go to the manufacturer to get a discount for buying in bulk.
  • Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).
  • Some challenges include channel stuffing, where manufacturers induce channel members to buy far more products than they can sell in a reasonable period.
  • Hairdressers can go to the manufacturer to get a discount for buying in bulk.

• Buying Situations

  • B2B buying situations vary from B2C buying situations, so B2B marketers must develop different capabilities.
  • Such detailed assessment eliminates the risk of buying the wrong product or service.
  • Buyers go though three stages of the buying process, which include:
  • The problem is that marketers have to face the realities of the B2B buying cycle, which include:
  • Like B2C businesses there are similar buying types in B2B sales activities that include new buys, straight re-buys and modified re-buys.

• Point-of-Purchase Promotions

  • Point-of-sale displays are sales promotions that are placed where they can easily draw customer attention and trigger impulse buying.
  • According to research, almost 66% of all decisions to buy something are made while people are in the store shopping.
  • What's more, 53% of these decisions are classified as impulse buying.
  • This is less common in larger retail outlets with strong purchasing power, because they control supplier activities and prefer to use sales material designed in-house to ensure that store layouts and corporate themes are consistent.
  • They won't buy what they can't see.

• What Are Markets

  • Markets are a group of potential buyers with needs and wants and the purchasing power to satisfy them.
  • A basic definition of a market is a group of potential buyers with needs and wants and the purchasing power to satisfy them.
  • The person or organization must be willing to buy the product.
  • The person or organization must have the authority to buy the product.
  • Consumer markets include individuals and households who buy consumer goods and services for their own personal use.

• Influences on Business Buying

  • Certain environmental and economic factors can lead to an apprehensive buying center.
  • Organizational factors such as the company's objectives, purchasing policies, and resources can influence the buying process.The size and composition of the buying center also plays a role in the business buying decision process.
  • The interpersonal relationships between people working in the company's buying center can hinder the buying process.
  • Buying center members need to trust each other and operate under full disclosure.
  • The personal characteristics of people in the buying center can influence the buying decision process.