Factors influencing economic choice

HideShow resource information
  • Created by: Em
  • Created on: 19-03-16 05:20

External Factors

Price 

  • The amount of mony paid by customers for a product/service

Price Elastic 

  • When demand drops off significantly because the product price increases
  • Usually applies to luxury goods

Price Inelastic

  • Refers to products where a price rise has little to no impact on demand for the product
  • Usually applies to essentials needed by the consumers (e.g. milk, bread, eggs, petrol etc)

 

1 of 3

External Factors (continued)

Market Strategies

  • These strategies raise awareness and desires for the product/brand
    • Ads (on TV, online, newspapers, magazines, bilboards etc)
    • Promotions
    • Product Placement 
    • Celebrity Endorsement 

Finance 

  • Consumers often don't have enough cash so they need to borrow money
  • The consumers could get into a debt cycle if they're not careful (they can't keep up with repayments so they borrow more money)
2 of 3

Internal Factors

Personal Factors

  • Consumers differ in age, gender, lifestyle, personality, ocucpation and economic circumstances
  • These differences influence their economic choices

Social and Cultural Factors

  • Word of mouth and 'peer pressure' can influence a consumer's decision making 
  • Fairtrade or organic products are an example of a cultural shift in consumer priorities 

Psychological Factors 

  • A brand's image or reputation can influence our perception and turn wants into what feels like, needs
  • Markets tyr and influence our loyalty and commitment to the brand 
3 of 3

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Economics resources »