Buying power

Buying power is often referred to as a consumer’s purchasing power — the

consumer’s ability to use the cash she has to purchase products to meet her

current wants and needs. Buying power, which is based on the consumer’s

income level and credit, allows her to change her lifestyle characteristics.

Buying power gives the consumer the power of choice, meaning that when

consumers have unlimited buying power, there are no limits to what they

can purchase to meet their needs. However, if a consumer has limited buying

power, her purchasing decisions may not be as uninhibited.

Manufacturers often analyze the buying power of specific market segments,

which allows them to design products and services that are a good match

with the average amount of disposable income that a consumer within a

specific income bracket is expected to use. As a marketer, it’s important to

understand the buying power of your consumers, because if you have some-

thing to sell, you must have people who have money to buy.

 It isn’t uncommon for consumer groups that share some of the same lifestyle

factors to gather and create buying power by purchasing in quantities. How

can you use this to your benefit? Consider tapping into groups that have the

buying power to purchase in quantities. You can often find this by evaluating

lifestyle. An example would be a group of attorneys who purchase legal jour-

nals at a discounted price because they purchase them in a quantity. This isn’t

to say that you can’t target individual consumers who have a large capacity of

buying power; they’re just typically a little harder to reach than groups. Keep

in mind that this also can be true for services that are purchased. Consider,

for example, the corporation that offers a discounted rate at a local gym to its

employees. The gym offers the discount because it’s reaching consumers in

masses rather than individually