Question

What is YOUR insight about MICROECONOMICS IN MARKETING?

Answer 1

Use the following points to frame your answer:

• Microeconomics deals with the behaviour of individuals and firms in a market in terms of decision making and allocation of resources.
• Marketing is the act of making profits by studying the demands, needs and wants of people in a market.
• The concepts of microeconomics and marketing are very closely related.
• Marketers use microeconomic models of consumer behaviour to determine may factors such as:

1. What are consumers willing to pay for a product
2. Desirability of a product or utility from it.
3. Which characteristics of a product increase its desirability.
4. How consumers react and respond to advertising techniques.

and many more such aspects,

• To identify the needs and wants of people, marketers use tools like market research and market intelligence to identify customer value and satisfaction and thus enhance their decision making stratergies.
• Then marketers decide how to target and segment markets and position products in such a way where the demand of that product lies the most.
• Tools like conjoint analysis and product life analysis are used to determine distrbution channels and pricing stratergies.  

Thus, to run an efficient and profitable business, microeconomics strategies are extremely important for the correct marketing strategies of a product.