As you know the U.S. has been in a recession for the past 4 years now and is still struggling to get fully out of it as we speak. This recession in the U.S. did not only affect the U.S. but made a global impact. During this recession many companies filed for bankruptcy and therefore had to lay off their employees. In other words, there was a major increase of unemployment rate. In the U.S. the unemployment rate jumped from 4.6% in 2007 to 9.0% in 2011. Besides the unemployment rate, the salary income is also an important demographic factor. The recession causes the salary income to shrink. All the above indicates that we’re going through hard times right now. This means that we, the people, are not easily going to give out money.
As stated above by the demographic factors, we are in a global recession. The extent of this global recession differs throughout the world. It’s logical that in these times there is an increase in the interest rates. This means that loan applications are being granted less often. Another economic factor that should be noted is the tax rates. These 2 before mentioned rates has a major influence on the spending characteristics of consumers. Social / cultural factors
Branding plays an important role in the success of a business. During hard times, branding plays even a bigger role than before. The fact that consumers are more hesitant to spend their money means that they’re not only looking at the functions of products/services but it’s now more important than ever to have a sense of involvement/belonging with this brand. With this being said, people are looking for the “extra value” of a brand. Their asking themselves; “If I ought to buy this brand and the functions are there, what else does this mean for me? What is the extra value?”. Technological factors
Technology plays a big role when manufacturing a product. Are...