The consumer market is represented by all the individuals and households that purchase products, goods and services for their own consumption. There is an increase in the consumer market each year. Their spending patterns can influence the economy.
According to quickmba.com, consumer markets can be segmented into various groups such as geographical, demographic, psychographic and behavioral. These segmented categories take into effect consumer location, ethnicity, education, occupation, income, values, attitude, price sensitivity and brand loyalty.
Segmented consumer markets are easier for companies and marketers to target with advertising and marketing strategies.
The consumer market has changed over the years due to lifestyle changes and changes in the consumption patterns of individuals and households in general.
Two thirds of economic activity is based on consumer spending. When unemployment is high, you have fewer people spending money, and the economy begins to slow down.
In tough times, the portion of the consumer market that is still employed becomes less confident about the economy and curbs spending, which drags the economy down even further.
To increase consumer spending and economic activity, businesses lower prices. Lower prices decrease profit margins. As a way to cut costs, because of a decreased profit margin, businesses will lay off people, which is the fastest way to trim the budget. The economy slows even further, and a vicious cycle feeds itself.