Fast Food and the Economy

Fast Food and Consumer Behavior

Kala Rockwell

Webster University

ABSTRACT

Marketing can impact the economy in one or two ways. First, marketing has the potential to increase the demand for a good or service. Effective marketing campaigns entice people to want/buy a specific good or service. The market demand curve is comprised of individual demand curves for a good. General theory states that consumers will buy less of a product as the price increases. However, marketing can cause the demand for the good or service to become more inelastic, which causes consumers to still buy even when the price increases. This is because strategic marketing plans have a goal to convince consumers that there is no real substitute for the good or service.

Some argue that consumer behavior is manipulated by marketing and that consumers need to operate within a “laissez faire” market. This paper will discuss the impacts of marketing on consumer behavior in the fast food economy and the ability to generate demand curves. It will test the following three hypotheses: (1) consumer behavior is influenced by marketing (2) effective marketing impacts the indifference curve (3) marketing can override the individual and market demand theory. The research paper will present the research that supports the psychological and economic theory of consumer behavior in the fast food industry to support the results demonstrating the economic effect from the efforts of marketing.

Introduction

Fast food has become a major source of nutrition for many Americans, and therefore has a large impact on the American economy in various ways. To begin to paint the picture of how important the Fast Food industry is to the U.S economy, it is important to understand its beginnings. Industrialization and automation turned out to be a benefit of the fast food industry. Mobility contributed to the rise of dining out and drive in restaurants. After World War...