A business has to act and react to what happens inside and outside of the company. Businesses exist within an external environment. This external environment is concerned with consumption and production. Economics is one of the main factors which is related to costs and prices of goods. What consumers want and need income, interest rates, exchange rates and rate of inflation (Sloman &Boer, 2009). This report undertakes secondary research to identify facts and trends for our SBE named as ‘Digi-wave’.
Why consumption is important?
Demand is unlimited people’s wants. Potential consumers make up a market, which are people with both the desire and the ability to buy specific products. All markets ultimately are people. There are three factors which affect demand. (Ken, 2002)
* Price of goods
The price of a good is the most influential factor consumer’s take into consideration. If the prices of some goods go down, this means that there is more money in a budget to be spent on other goods. However, if prices of goods rise there is less to spend on other goods. It is by this reasoning that the prices of other unrelated goods will have an effect upon the demand for any product.
In general terms, when the public’s income rises this influences consumer’s demand. People, who have low incomes, often buy products which they consider to be inferior to other products, which they would prefer, but cannot afford.
Taste is the most important influence of consumer’s demand. Tastes include the value from people’s ideas, quality of goods, fashion, morality and straightforward preferences. For example, many people will not buy products which are made in certain countries where human rights are abused (2002, Ken...
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...ith a poster and some advertisements in student accommodation.
Increase awareness of potential users in both customer segments who have never heard of SBE named as Digi-wave.
Distribute products through Hikuwai Plaza at AUT.
Wholesalers, retailers and mass merchandisers, must reach organizations purchasing departments.
Sloman, J., & Boer, P,. (2009). Economics: New Zealand, Prentice Hall New Zealand.
Ferguson, K. (2002). Essential economics:a guide for business students. London:Palgrave
Trading Economics. (2009). Retrieved from http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?Symbol=NZD
Trading Economics. (2009). Retrieved from http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=NZD