First Alert

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MBA 535 – Assignment E |

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Anytime a company deals in the selling of goods they must understand and be able to react to changes in the economy. I will develop a proposal for First Alert to deal with the impact of the economy, but first, I would like to describe some of the economical factors that First Alert will need a plan for.

The three economic areas of greatest concern to most marketers are consumers’ incomes, inflation, and recession, (Lamb, Hair, & McDaniel, 2013). Several factors can affect peoples’ incomes such as unemployment, interest rates, and tax rates. As disposable incomes rise or fall, consumers will spend more or less on certain products. When incomes are lower, or aren’t rising to keep up with the cost of living, consumers will be less likely to buy things that aren’t considered necessities. In order to prepare for this type of economic impact, First Alert has to know its market and make sure that the Atom is priced low enough to appeal to consumers. First Alert should also be preemptive in its marketing to let consumers know that smoke detectors should be considered a necessary product for every household because they save lives. In doing this, First Alert can help to lessen the impact of lower sales due to disposable incomes being less. People will still buy the Atom because they will consider it to be a needed item and not a wanted one.

Rising incomes don’t necessarily mean that consumers can afford to spend more money. Consumers’ ability to purchase more products and spend more money is a function of purchasing power. Purchasing power is measured by comparing income to the relative cost of standard set of goods and services, usually referred to as a cost of living, (Lamb, Hair, & McDaniel, 2013). When income is low relative to the cost of living consumers will have less discretionary income. That means people will have less money to spend on nonessential goods. Again, as with consumers’ incomes, it is...