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How Economists Have Recognised Psychological, Social and Corporate Influences on Consumer Choice - Research Paper Example

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The author of this paper gives detailed information about the psychological, social, and corporate influences on consumer choice, touching on the corporate influence in these decisions as well to illustrate how these factors influence consumer choice…
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How Economists Have Recognised Psychological, Social and Corporate Influences on Consumer Choice
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Download file to see previous pages There is an aspect of economics that is directly tied with the consumer and their psychologically-driven buying behaviors as well as their complicated social demands related to peer interaction or the relation of a specific product with their unique, segmented lifestyle habits. These are aspects that today’s business use in their marketing strategies, which illustrate how economics and marketing are closely related. Consumer attitudes and beliefs can dramatically impact the economics of supply and demand, which creates a concern for businesses and economists alike. 

In economics, the price elasticity of consumers is often considered, which is the “percentage change in the quantity demanded of a product divided by the percentage change in the price of that product” (Boyes and Melvin, 2005, p.475). Essentially, price elasticity is the willingness of a consumer to purchase a particular product or service at the given price. Dramatic or even noticeable price changes can lead to the demand decreasing on these consumer products and services. Price elasticity is not only about statistics, but it also deals with less-obvious aspects of personality in which pricing becomes a psychological concern as well. Companies that compete in technology sectors, as one example, often use pricing strategies designed to outperform the competition on similar-built products and models. Once a business has lowered pricing because demand has dropped, “it can never raise the price again without negative publicity” (Holweg, 2004, p.46). In this case, the media plays an influence on how consumers spend because the retail organization has attempted to increase a price, thus aspects of human behavior come into play such as resistance to change or lack of trust in the organization’s selling principles. From the viewpoint of the economist, pricing has created a conglomerate of situations which alter consumer sentiment, thus they are not buying the product. ...Download file to see next pages Read More
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