Explain, in some detail, the economic factors that influence marketing decision making.

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literaturenerd | High School Teacher | (Level 2) Educator Emeritus

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There are four generally recognized economic factors: supply and demand, interest rates, inflation and unemployment.

Supply and demand is important in marketing decision making given companies must decide how much of a product to make. If the demand is great, and supply is low, marketers may use this "edge" to increase consumer desire. This could allow companies to raise the prices of a desired product based upon lack of product and increase of desire.

Interest rates are important when making decisions regarding marketing. For example, some companies may boast the lowest interest rates (but only give the lowest rates to the best qualified applicants). On the other hand, some companies may be very forward about higher interest rates, but approve less qualified applicants. These marketing decisions are based upon the decisions the marketing companies make.

Inflation is important when marketing decisions are made given that higher inflation normally means that consumers pay higher prices. Consumer friendly companies may try to use consumer friendly marketing focusing upon speaking out against inflation.

Especially today, many people are unemployed. With the rate of unemployment as high as it is, many marketing companies would try to sympathize with the financially strained consumer. By using commercials or advertising which shows dropping prices or special financing, the marketing company has helped the company they are working for show their compassion for the consumer.

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