Paper Summary:

This paper discusses how companies need to understand consumer behavior in order to determine the best way to shift demand in favor of their products. When companies are able to ascertain why consumers purchase particular goods and services, they can tailor their marketing efforts to address the needs of consumers. It explains how this increases sales, and improves the profit performance of the organization. It also discusses how consumer behavior can also help companies increase demand by helping consumers accept new uses for existing goods and services. It examines the close relationship between consumer behavior, demand, and marketing.

From the Paper:

"According to some analysts, American consumers are spending a higher percentage of their incomes than most other industrial nations, and even higher percentages than they have in the past. In 1998, consumer income increased by five percent, but consumer spending increased six percent. Consumer saving was approximately one-half of one percent of income (Walden, 1999, p. 46).
At the same time, consumers are taking on additional debt, also for purchases. American consumers spend an average of 18 percent of income on non-home loans, a record level of indebtedness (Walden, 1999, p. 46). This causes some economists to be concerned about the possible ramifications of a downturn in the economy. The concern is that consumers lacking sufficient savings to withstand a downturn will slow or even halt spending, and some consumers may be forced into bankruptcy in this situation because they lack appropriate financial resources."

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