The Power of Consumer Confidence

Consumer Confidence

In laymen’s term consumer confidence is how we gauge the economic’s overall standing. It indicates how the consumer feels about the economy. How confident people feel about the stability of their incomes.
Typically consumer confidence increases when the economy expands, and on the other hand it declines when the economy contracts. In essence, if consumer confidence is high, consumers will be making more purchases. On the other hand, if confidence is lower, consumers tend to save more and spend less.
However, this does not necessarily happen, since consumers may not have perfect information on the situation of the economy. In the United States, there is evidence that the measure is a lagging indicator of stock market performance.

Consumer spending is estimated to make up two-thirds of the economy, thus making it a decisive factor in economic health. National currency values are backed by the strength of that country’s economy. And studies have proven that confident consumers pump more expendable income into extraneous items.
Consumer Confidence is a very qualitative term which denotes the health of the economy of the country. It is affected by a number of factors, overall economy, share market and industrial environment.
Its effect could be gauged by the last year recession itself, like low sales, large layoffs and all this point to lower customer confidence. You see lower sales and demand for goods leads to higher layoffs. It’s a vicious circle and a cycle which needs to be broken if the world economy has to revive.
That is why the power is laid beyond consumer confidence. Companies should try to boost Customer confidence by giving consumers some new innovative products, services at fair prices. Actually marketing has also undergone changes in previous recessions.

If you’re in marketing you’ll notice that, nowadays you can’t simply bombard consumers with direct marketing, the new technique is through sales promotion. Advertising through the internet and television would do the trick. Another way is through branding strategies this will help in boosting buyer’s confidence.
The best technique here is that companies would do regular surveys in order to gauge consumer confidence in their markets, which would help them work out their product and marketing strategy. Since its a qualitative term, we need to be careful while interpreting the results of the survey. Each survey should include sample’s from present as well as prospective customers, sales people, and other network marketers of the Company.

Customer Confidence is deeply affected by the liquidity in the economy, availability of cash with the people, since if people have more of cash at their disposal then they would be more biased towards buying. It’s just a chain, how would people acquire so much money in order to make purchases. The answer would simply be jobs.
Therefore consumer confidence will increase if you’ve shown them , what are the benefits that would accrue by using or consuming the product. As a result it would be a win win situation for everyone and the country’s economy as a whole.

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Winners Edge Trading was founded in 2009 and is working to create the most current and useful Forex information and training available on the internet.

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