Economical Factors Affecting Buyer’s Behavior:
A need when identifies an object to fulfill that need becomes a want. A want backed by a buying power becomes a demand. A demand leads the person to make a purchasing decision, which is duly affected by the economic factors such as personal income, family income, consumer credit, govt. policies, etc.
- Personal Income: Income of a consumer is most important factor affecting the demand and subsequently the purchase decisions. Every person has unlimited wants but limited resources so higher the income higher is want backed by the buying power i.e. demand. The demands may increase or decrease depending upon the person’s expectations about the future income. A person’s deposable income is what is left after fulfilling the basic needs and the disposable income increases the purchasing power of the consumers.
- Family Income: The low-income families have lesser demands and happy and prosperous family income have more demands.
- Consumer Credit: The facility of credit available to the consumer increases the demand.
Government Policies: Tax rates and other government policies have a great impact on the consumer’s buying behavior.