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Running head: REPORT 1

REPORT 5

Consumption Behavior; Electronics

Student’s Name

Institutional Affiliation

Topic description

Consumption behavior is the manner in which an audience responds to product marketing. Consumption behavior is also referred to as buying behavior, and it revolves around the buying intentions and attitudes of individuals. It is important for producers to understand the consumption behavior of existing and prospective customers; this way, they can make goods and services that align to customer tastes and preferences (Friedman, 2018). In addition to that, understanding consumption behavior helps producers to manufacture or process goods that match the aggregate demand of customers. It is not advisable for a business to engage in mass production without considering rough estimates for demand as such may lead to excess inventory that never manages to get off the shelves. This project will give invaluable insights with respect to the behavior of buyers towards electrical appliances.

Significance of the Project

The project is significant because it will answer a multiplicity of pertinent questions regarding market equilibrium of electronic appliances, the influence of Adam Smith's invisible hand in the electronics market, determinants of aggregate demand, and drivers of supply among others. As such, consumers, suppliers, producers, and investors will find the study insightful with respect to answering market questions they may have (Roos & Hahn, 2017). The significance of the research questions offered by the study is that it will make audiences more rational in the choices they make. First, after reading the study, buyers may decide to commit to buying high-quality products as opposed to those of less quality which require replacement every six months. What's more, a majority of the producers that read the study may be influenced to produce high-quality products that make their brand unique in the eyes of customers; with a promise of high quality and longevity of the products involved to customers. Third, the research may influence suppliers to be more committed to excellence.

Historical Data for Key Parameters

The steady sale of electronics in The US does seemed to have followed a clear pattern over time. The frequency with which consumers buy electronics seems quite high. Most producers are looking strike a balance between quality and price get the most customers. Where some are just trying to cash in with cheap and flashy items. The graph below depicts the time line for The US computer/software store sales from 1992 to 2015. Currently, the US Electronics Store Sales is in excess of $25 Billion USD annually.

Source: https://www.statista.com/statistics/197603/annual-computer-and-software-store-sales-in-the-us-since-1992/

The necessity of electronics to us becomes evident when you look at how many US homes have them. The percentage of US house hold owning home computers has increased exponentially. From the beginning of the home computer market in the mid-1980s to the present day. With limited shelf live and the constant need for updates this would seem to be a huge market with continual expansion.

With a home computer ownership in excess of 89% and a market of approximately $25 Billion US Dollars the potential is huge. In The USA electronic industry, the producers must figure out what moves customers and take advantage and grow.

Scope and objectives for the project

The information needed to bring this project to life will mostly revolve around theories of consumer behavior and historical data. My objective is to see how consumption behavior theories apply to the electronics market will start with simple causal loops. I believe I will have to create at least four loops as a basis for this to be effective. These should cover flash, Competition, Development and manufacture. Creating these and seeing how they tie in together should show what kind of market this really is

References

Friedman, M. (2018). Theory of the consumption function. Princeton university press.

Roos, D., & Hahn, R. (2017). Does shared consumption affect consumers' values, attitudes, and norms? A panel study. Journal of Business Research, 77, 113-123.

“U.S. Households with PC/Computer at Home 2016.” Statista, https://www.statista.com/statistics/214641/household-adoption-rate-of-computer-in-the-us-since-1997/.

“U.S. Computer and Software Store Sales 1992 to 2015.” Statista, https://www.statista.com/statistics/197603/annual-computer-and-software-store-sales-in-the-us-since-1992/.