External Influences: Situation and Economic Conditions

Purchase Situation

A purchase decision can be strongly affected by the situation in which people find themselves. In general, a situation is the circumstances a person faces when making a purchase decision, such as the nature of their physical environment, their emotional state, or time constraints. Not all situations are controllable, in which case a consumer may not follow their normal process for making a purchase decision. For instance, if a person needs a product quickly and a store does not carry the brand they normally purchase, the customer may choose a competitor’s product.

Marketing Implications:

Marketers can take advantage of decisions made in uncontrollable situations in at least two ways. First, marketers can use promotional methods to reinforce a specific selection of products when the consumer is confronted with a particular situation. For example, automotive services can be purchased that promise to service vehicles if the user runs into problems anywhere and at anytime. Second, marketers can use marketing methods that attempt to convince consumers that a situation is less likely to occur if the marketer’s product is used. This can also be seen with auto products, where marketers explain that using their product will prevent unexpected damage to their vehicles.

Economic Conditions

The current state of economic conditions has a direct impact on buyers. While, in certain cases, a consumer’s financial status is controllable (i.e., able to control wasteful spending), in other instances what the consumer has available for spending is affected by economic factors that are beyond their control. Clearly, if someone has suddenly lost their job, the impact on purchasing may be immediate and force major adjustments in what is purchased. Additionally, expectation of future economic conditions could impact purchasing. For instance, if the sentiment exists that the economy is posed to grow than buyers may feel that engaging in purchasing of expensive items holds less risk than if the same decision were made during times when the forecast is for an economic slowdown.

Marketing Implications:

As we note in the Managing External Factors Tutorial, it is vital for marketers to continually monitor changes occurring in the economy in which they operate. Monitoring can help alert an organization to the need for adjustments in their marketing strategy. For instance, monitoring may suggest the economy is expanding and may offer the potential for an increase in customer demand. This may lead the marketer to make adjustments in an effort to build a larger customer base (e.g., increase advertising, launch new products). Alternatively, indications the growth of the economy is slowing could signal that customer demand may soon be on the decline suggesting the marketer may need to make adjustments to help stimulate demand (e.g., lower prices, increase sales promotions). For organizations that target a wide geographic market, monitoring may include analysis of economic conditions on a national and possibly international level.? But for marketers serving highly targeted geographic locations, it is also important to monitor local economic conditions. For instance, large retailers with stores located in small towns may find decisions will need to be adjusted within individual stores given the economic conditions facing the market that each store serves.