Discuss the Socio-Economic Factors Affect Consumer Behaviour and Movement - Economics Essay Example
Consumer behaviour refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants - Discuss the Socio-Economic Factors Affect Consumer Behaviour and Movement introduction. There are different processes involved in the consumer behavior. Initially the consumer tries to find what commodities he would like to consume, then he selects only those commodities that promise greater utility. After selecting the commodities, the consumer makes an estimate of the available money which he can spend.
Lastly, the consumer analyzes the prevailing prices of commodities and takes the decision about the commodities he should consume. Meanwhile, there are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. Cultural Factors: Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class. Social Factors: Social factors also impact the buying behavior of consumers.
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The important social factors are: reference groups, family, role and status. Personal Factors: Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept. Psychological Factors: There are four important psychological factors affecting the consumer buying behavior. These are: perception, motivation, learning, beliefs and attitudes.
Factors affecting Consumer Movement: The consumer movement exercises a considerable influence on the socio-economic environment of business. In a country like India where there is a high percentage of illiteracy among people, where people are less informed and where critical goods are always in short supply, the Government has a significant role in safeguarding the interests of consumers by promoting a climate of fair competition and preventing exploitation of consumers.
The main socio-economic factors affecting the consumer movement are: Population Problem: Indian economy faces a seemingly insurmountable problem on account of a high rate of population growth. The growth in population further aggravates the problem of poverty and unemployment. It is to be noted that India’s population has already surpassed the 1 Billion mark. Over 30 to 40% of the Indian population is estimated to be below the poverty line. They have no access to basic necessities such as food, clothing, shelter, health care, and education.
Unemployment: The problem of unemployment means the problem of providing work to those who are willing to work. A large number of educated and uneducated people, who are capable of work and are also willing to do it, roam here and there without any job. So the problem has assumed an acute form. There are a large number of people who are either partly employed or wholly unemployed. The lives of such people, as well as of their families, are extremely miserable. The problem of unemployment is mainly an economic one.
It is essential, therefore, that the economic policy of the country be overhauled. They are neither buyers nor sellers and are thus, left outside the market system. Adult Illiteracy: Another major problem we fact is adult illiteracy. Developing consumer awareness is directly linked to the literacy factor and therefore, the consumer movement in India has to encounter a very difficult problem in bringing consumer awareness among the masses. Inflation: Inflation is another economic problem that adversely affects the consumers in India.
Several factors such as increased income in the hands of people, financing of government expenditure through deficit financing, increase in wages of government and private sector employees and inadequate supply of goods and services to meet the rising demand contribute to inflation and push up the prices for the consumers. Through price and distribution controls, the government has been making efforts to tackle the problem of inflation. But from the experience gained over the last four decades, it is found that these measures are not adequate to meet the desired objectives.
Economic Liberalization: Under the new policy of economic liberalization, government is cornmitted to remove price and distribution controls except in respect of a few selected commodities that are supplied through the public distribution system. Consumers are left to protect themselves against price rise in a free market economy in which multinational corporations and monopoly business houses with high market strength and full economic advantages will be dictating terms to the consumers and charging prices at their will.