Consumer management

• The Consumer


  Is the lynchpin of its getting close to the customer operating philosophy
• Demand estimation


  The quantity of a good or service that customers are willing and able to purchase during a specified period under a given set of economic conditions
• Demand


  Where it is the aggregate of individual or personal demand
• Market demand


  Where it is determined by the value associated with acquiring and using any good or service and the ability to acquire it
• Individual demand


  Relates to the direct demand for personal consumption products where this model is appropriate for analyzing individual demand for goods and services that directly satisfy consumer desires
• Utility


  This is the value or worth of a good or service, prime determinant of direct demand
• Goods and services


  Are sometimes acquired because they are important inputs in the manufacture and distribution of other products
• Utility maximization


  As described by the theory of consumer behavior explains the basis for direct demand
• Market demand function


  For a product is a statement of the relation between the aggregate quantity demanded and all factors that affect this quantity
• Supply of products


  Arises from their ability to enhance the firm's value-maximization objective
• The amount of any good or service supplied will rise when the marginal benefit to producers is greater than the marginal cost of production
• The amount of any good or service supplied will fall when the marginal benefit to producers is less than the marginal costs of production
• Among the factors influencing the supply of a product, the price of the product itself is often the most important
• When marginal revenue exceeds marginal cost, firms increase supply to earn the greater profits associated with expanded output
• Individual firms supply output only when doing so is profitable
• When quantity demanded and quantity supplied is in perfect balance at a given price, the product market is said to be in equilibrium
• An equilibrium is stable when underlying demand and supply conditions are expected to remain stationary in the foreseeable future
• Response bias


  Where respondents might report what they believe the questioner wants to hear
• Response accuracy


  Where even if unbiased and forthright, a potential customer may have difficulty in answering a question accurately
• Cost


  Where conducting extensive consumer surveys is extremely costly