Effects of High Unemployment on Consumer Spending
High unemployment rates lead to low currency supply in the consumers hands and reduce their discretionary funds hence reducing their purchasing power. HNAPL’s plan will not succeed as the six products it is aiming to sell are not necessity goods and are very sensitive to income change. High unemployment leads to unsteady income flow making consumers be unwilling to spend the funds in their hands on HNAPL’s products (McKechnie, 2012, p.5). They will tend to hold money for the transaction, speculative and precautionary motives. The competition for oil products it is very high and high unemployment rates will not be favourable to HNAPL’s products as there are already well-established oil products with low prices which consumers will favour (Kacen & Lee, 2012, p.163). Low consumer confidence in increases psychological pressure to consumers hence cutting their spending conscious and reduce expenses and purchase frequency. Consumers will tend to spend less on personal care and households products and postpone leisure and luxury goods expenditure hence they will postpone expenditure on HNAPL’s macadamia products. Low consumer confidence increases their saving power (Ozaki & Sevastyanova, 2011, p.2217). Consumers will save their extra income for future use and will not be willing to spend on HNAPL’s macadamia products. Low consumer confidence will lead to delayed investments hence retailers it will not be willing to invest in selling HNAPL’s macadamia products as they predict low consumer spending patterns.
Instability in economic conditions makes consumers become sensitive and more rational to price hence reducing their buying habits. Consumers will prefer cheap domestic brands to foreign ones as they pay attention to price than quality hence HNAPL’s macadamia products will not have a competitive advantage in (Rani, 2014, p.52). Uncertainty will make consumers more careful and their money and scared to spend and will not spend premium products even if they can afford hence they will not spend on HNAPL’s macadamia products as they are not necessity goods. Uncertainty will also make consumers change shopping places to online shopping as it is attractive, convenient and low cost hence affecting HNAPL’s plan (Mueller, 2010, p.137). Consumers will limit their expenditures as they have to take extra work to get income. Consumers will focus on promotion advantages and they will buy products giving them interest such as price reduction and awards but HNAPL will not be able to give those advantages to avoid loss.
One of the social-economic factors influencing the success of HNAPL products is consumers’ income. Income levels determine and influence consumers’ purchasing power. Macadamia products are cheap compared to other plant oils in hence it is affordable for many consumers with sufficient income (Bastion et al, 2009, p.33). Education is another factor as learned consumers have knowledge about their healthy diet. Educated Jermany residents purchase macadamia products as they understand it lowers cholesterol in their body improves their nervous system, improves vision, strengthen bones and prevent heart disease risk. Many consumers will be willing to purchase the products for their benefits to their health, hair and skin. Another factor is employment (Fuchs, Prandelli & Schreier, 2010, p.65). It has adopted the euro and introduced economic reforms boosting its economy hence consumers in the region have secured jobs increasing their purchasing power on consumption goods and they can purchase HNAPL macadamia products. Jermans work outside such as guards hence they will be willing to buy macadamia oil to prevent skin cancer hence boosting the success of HNAPl.
Impact of Consumer Confidence on Spending Patterns
Jermans have several ideologies and values governing them. One of the cultural factors influencing HNAPl’s success is gender. They expect females to buy beauty products hence females put beauty products as necessity goods hence they will be willing to purchase macadamia oil and hair products. Jermans have different status including upper, middle and lower class. They expect the upper-class people to spend on luxurious items hence they will be willing to purchase chocolate coated macadamia nuts, macadamia nut cheese and roasted and salted macadamia nuts for luxury (Ludvigson, 2014, p.29). Political cultures will boost the success of HNAPl in Jermany as Australia and Jermany have had strong political relations hence consumers will favour products from Australia. The political culture is monetarily oriented hence consumers applaud entrepreneurship and they are will to engage in global markets and they will accept and buy Australian products.
The United Kingdom will provide a potentially profitable opportunity to HNAPl as it has a stable economy hence the buying tendency of its consumers is high. Many Residents of the UK are employed receiving high and steady incomes hence they can buy premium goods such as HNAPl’s products. Another factor is the lifestyle of the UK (McEachern et al, 2017, p.168). Consumers are brand conscious and they want to maintain a high standard and image hence they will buy HNAPl’s macadamia products as they are quality and of high standards. The age factor also will boost HNAPl’s success in the UK as most of its population is the youth. The youth are more interested in buying luxury goods, trying new brands and quality sensitive hence they will be more willing to spend on HNAPl’s products (Hu & Cox, 2009, p.5).
HNAPl’s products will give it a profitable opportunity in Netherland as its residents are familiar and have experience with oil plant products. They understand their importance to their health hence they will be willing to buy macadamia products (De Mooij, 2010). The occupation of many people in the Netherlands encourages them to purchase macadamia products to prevent them from diseases such as heart disease as they work without physical exercise. More than average population of Netherland live above the poverty line and they consume on necessity goods as well as luxury goods hence they will be willing to purchase HNAPl’s products (Mueller, 2016, p.19). Healthcare is very high in Belgium and the providers encourage people to take cholesterol-reducing products such as macadamia products. Belgium residents will generally accept HNAPl’s products for their health. Economic trends in Belgium most of the time are in peak and people have high discretionary funds to spend. During peak seasons they will be willing to spend on HNAPl’s products as they have high disposable income. There is a high living standard in Belgium. Many people have enough funds for necessary goods and luxury (Zeithaml, 2015, p.2). They are brand and quality conscious and they prefer foreign good which is expensive for prestige and to maintain their standards hence they will spend more on HNAPl’s products.
References
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