Having a product that meets the needs of consumers

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Unformatted text preview: $49,999: 15% Consumer Income The microeconomic trends in terms of consumer income are also important issues for marketers. Having a product that meets the needs of consumers may be of little value if they are unable to purchase it. A consumer’s ability to buy is related to income, which consists of gross, disposable, and discretionary components. Gross Income The total amount of money made in one year by a person, household, or family unit is referred to as gross income (or “money income” at the Census Bureau). While the typical U.S. household earned only about $8,700 of income in 1970, it earned about $48,201 in 2006. When gross income is adjusted for inflation, however, income of that typical U.S. household was relatively stable. In fact, inflation-adjusted income has only varied between $40,187 and $49,244 since 1977. Figure 3–4 shows the distribution of annual income among U.S. households.15 Are you from a typical household? Disposable Income The second income component, disposable income, is the money a consumer has left after paying taxes to...
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