Understanding the Market Changes
It is not possible for any business to remain an industry leader forever. The consumption patterns of people change with the passage of time and new innovations are now essential to survive in the market. It is not easy to reach the consumer with old ideas. Being stuck with the same old ideas will lead to a great decline in sales with the ultimate result of a failure in business.
It should also be kept in mind that the pace of change depends upon the nature of business. If a business is technology-based, then rapid change is expected in that category while food patterns remain the same for many years and change takes place in the food patterns of people after so many years.
We can have an example of the cell phone industry where we can find new models of cell phones every year. Every cell phone company brings innovations in its new model to compete well in the market. On the other hand, if a person takes cereals for breakfast, he may continue this food for many years.
Why Customer/Consumer Spending Patterns May Change
Nobody can stop change. Especially in business, it is not possible to stick to one thing. There are various reasons for the changing patterns of consumers. Some of them are discussed below:
Change in Income
If there is a high rate of unemployment in an economy or the job market is not certain then people will try to spend less while in a stable economy, where there are better opportunities for employment and business, people spend more.
Change in Fashion
Consumers go to buy new clothes every season. It is essential for every fashion brand to launch new designs to attract consumers. People also love to spend on clothes according to the new fashion and season.
Change in Technology
We all know that technology changes at a very fast pace. We can have an example of the cell phone industry where every company launches new models of cell phones. The new LED TV systems have replaced the old ones. iPads and Tablets have also a great impact on lifestyle. As people adopted the use of new technology, their spending pattern is changed.
Consumers spending patterns are changing because of an increase in old age people in different countries of the world. We can have an example of anti-age creams that are in demand, especially for the old age population.
The Importance of Changing Customer Needs
There is a famous saying in business that “Customer is King”. All the businesses and industries work to fulfill the needs of their target customers. The needs of consumers change according to the change in their tastes and choices. The business organizations respond according to these changes and address the customer needs day by day. Addressing the changing needs of customers is essential for any business to survive in the market. It should also be kept in mind that the business organizations that fail to respond to the changing trends in consumer preferences, may lead to failure sooner or later.
Why Some Markets Have Become More Competitive
As technology changes, it affects many other things related to it. There was no internet many years back so communication was slow but now with the help of the internet and email, communication has been reshaped. Transportation has become very fast. Telecommunication services also played an important role in the growth of businesses. Some factors that make the markets more competitive are discussed below:
Due to globalization, it has become easier to find customers all over the world. Any business organization can find the market for its products and services all over the world that can increase the competition, especially for local competitors.
With the help of fast transportation, it has become easy for any business to supply its products all over the world. Most of the products are transported through containers that are moved through goods trains, ships, by roads and through air transport.
Internet and E-commerce
Internet and E-commerce have made it possible for consumers to search for products from all over the world. It has increased the competition especially for those countries where labor is not cheap. Countries competing with cheap labor have some advantage to compete in this competitive business environment as well. Most of the business organizations that are offering products in the market are also offering products through different e-commerce websites as well.
How Businesses Can Respond To Changing Spending Patterns And Increased Competition
It is necessary for every business to address its customers in this ever-changing world. The business should focus on the changing trends in consumer choices. If a business fails to focus on changing consumer trends, it will be difficult for that business to survive in a highly competitive market.
Good Customer Relations
It is highly recommended for all businesses to keep their customers close to them. It is important to remember that keeping existing customers close by giving them good customer services is far better to find out new ones. Making a new customer costs much more than retaining an existing customer.
Maintaining Existence Products
If any product is popular in the market, it doesn’t mean that it will remain popular for a long time. The existing products also need quality control. In case of a decrease in quality, there is a chance that an existing product can also be failed.
Introducing New Products
It is not enough for any business to have some popular products in the market. It is better to introduce some new products according to the new trends and choices of the customers. Business organizations should focus on the spending patterns of consumers while designing new products.
Keep the Costs Low
If the cost of the product is high, the price of that product will also be high. It is highly recommended to keep the cost of the product low to make its market price low. The low market price will be beneficial for the business to compete in the increased market competition.