purchasing power

Examples of purchasing power in the following topics:

• Consumer Income, Purchasing Power, and Confidence

  • A consumer's buying power represents his or her ability to make purchases.
  • Purchasing power is the amount of goods or services that can be purchased with a unit of currency.
  • If one's monetary income stays the same, but the price level increases, the purchasing power of that income falls.
  • A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation.
  • Illustrate the relationship between consumer purchasing power, pricing and the economy

• 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.
  • For example, a steel mill might purchase computer software, pencils, and flooring as part of the operation and maintenance of their business.

• Point-of-Purchase Promotions

  • Point-of-purchase displays can include shelf edging, dummy packs, display packs, display stands, mobiles, posters, and banners.
  • At some point in your life, you have been motivated and stimulated to buy something on impulse: an unplanned and somewhat emotionally driven purchase.
  • Point of purchase promotions offer marketers one of the most effective sales promotion tools included in the "promotional mix."
  • 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.

• Family

  • Many factors influence purchasing.
  • Often, the decision maker changes based on the type of purchase or the size of the purchase.
  • Families influence purchases in many ways.
  • Interaction between spouses and the number and ages of children play a particularly powerful role on buying behaviors.
  • These family influences affect how consumers look at purchases more directly than most other social influences on consumer purchasing.

• General Economic Conditions

  • Unemployment is low, consumers' buying power is high, and the demand for products is strong.
  • Unemployment rises and consumer buying power declines.
  • During a recession, consumers' spending power is low, as they are busy paying off debts incurred through credit purchases during more prosperous time.
  • Consequently, consumers are unable or reluctant to purchase products, particularly big-ticket items.
  • Also, consumers tend to delay replacement purchases.

• The Many Goals of Persuasion

  • Advertising, personal selling, sales promotion, and public relations activities are commonly used to persuade consumers to make a purchase.
  • Strategically placing and arranging products in stores to allow for maximum visibility and purchase opportunities.
  • Colors and imagery can serve as powerful visuals for quickly conveying a product's ability to successfully meet consumer needs.
  • Even after a purchase is made, companies devote sales and customer service teams to supporting customers with training and other educational programs.
  • Describe the techniques used to persuade consumers to purchase products over competing brands

• Reference Groups

  • Reference groups are groups that consumers will look to for help in making purchasing decisions.
  • Reference groups are considered a social influence in consumer purchasing.
  • They are often groups that consumers will look to to make purchasing decisions.
  • Reference groups can and do have a tremendous influence on purchasing decisions.
  • The friends we have are often one of the most powerful reference groups in influencing our consumer behavior.

• Discounting

  • A noncumulative quantity discount applies to each purchase and is intended to encourage buyers to make larger purchases.
  • The buyer adds to the potential discount with each additional purchase.
  • Such a policy helps to build repeat purchases.
  • Electric power companies use the logic of seasonal discounts to encourage customers to shift consumption to off-peak periods.
  • Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).

• Post-Purchase Behavior

  • Post-purchase behavior is when the customer assesses whether he is satisfied or dissatisfied with a purchase.
  • Post-purchase behavior is the final stage in the consumer decision process when the customer assesses whether he is satisfied or dissatisfied with a purchase.
  • How the customer feels about a purchase will significantly influence whether he will purchase the product again or consider other products within the brand repertoire.
  • A customer will also be able to influence the purchase decision of others because he will likely feel compelled to share his feelings about the purchase.
  • Some companies now opt to engage their consumers with post-purchase communications in an effort to influence their feelings about their purchase and future purchases.

• Sales Promotion

  • Contests, coupons, giveaways, loss leaders, point of purchase displays, premiums, prizes, product samples and rebates are sales promotion devices.
  • Reward programs involve collecting points, miles, or credits from purchases and then redeeming them for rewards.
  • The purchase of a product can also enter a buyer in a contests, sweepstakes, or online games.
  • Other in-store sales promotions include pull-out fact sheets, special lighting and animated displays powered by solar energy and policy promotions such as "ladies nights" or "kids eat free" offers.
  • Wholesalers, retailers and other organizational groups are offered a wide array of sales promotion devices such as trade allowances or short term incentives to encourage retailer to stock up on a product, dealer loaders incentivizing product purchase and display, trade contests for selling the most product, point-of-purchase displays to create impulse buying and spiffs or bonus commissions on certain products and trade or functional discounts paid to distribution channel members for conducting sales and special events.