Consumer's income and its implications on your marketing plans

Marketing plan is not just a yearly ritual that managers should perform, so as to give an impression of being proficient. If truth be told, a sound marketing plan plays a pivotal role in the success or failure of any product (or product line). Along with many other aspects, a core function of marketing plan is to look at the marketing environment and how it will affect the product in question. Marketing plan comprised of (but is not limited to) taking into consideration the overall situation of the market and economy, consumers, competition, upcoming trends and consumer behavior. Another part of marketing plan is customer segmentation based on different preferences, age, demographics or social class.

The most influential factor in consumer’s purchase pattern is of course, their income. Income plays an important role in distinguishing social class and consumer behaviors. A significant shift in consumer's income can invariably change the way they look and decide about purchasing some specific product. When the income increases, normally the quality of the product and the satisfaction they are getting out of this purchase becomes more important, on the other hand when it goes down, the cost may become the most decisive factor. Consumer’s income is also said to effect the hedonic consumption.

There are other factors for sure; however a shift in income can outweigh many of them. Therefore, when you are in the initial stages of making marketing plan, keep in mind the income level and social class of your targeted customers, and build up your plan around it. You can conduct your own research, to get an idea of the average income of your targeted customers; or you can also rely on secondary resources if you are a small business.

The information will help you in determining future demand for the product, consequently helping you in setting prices for your products. Also, when you are about to launch a new product (or an old product in a new market); you must consider the personal income of your targeted customers. For the reason that they are less likely to spend on trying a new product and experimenting when their income is decreasing, no matter how good the product is, except for when someone comes up with an alternate product or service which is cheaper than the existing one (that is why the recession is the best time for small businesses to get a jump start by providing low cost alternatives to the consumers caught in financial crisis).

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