Final answer:
Income levels affect consumer purchasing behavior, where high-income consumers are less price-sensitive and medium-income consumers are more concerned with value. The decision on targeting high versus medium income consumers for a product like a laundry machine should be based on the product's features, price point, and the purchasing power of the target market.
Step-by-step explanation:
Understanding Target Market Selection Based on Income Bracket
Income levels significantly influence consumer choices and the elasticity of demand for products. A consumer's disposable income dictates the range and quality of goods and services they are likely to purchase.
For instance, those with high incomes (> $100,000) generally exhibit less price sensitivity compared to those with lower or medium incomes ($40,000 - $99,999). They tend to make purchases based more on quality and features rather than solely on price.
Conversely, individuals with medium incomes are more price-conscious and may prioritize value. When deciding whether to target high income or medium income consumers, companies must consider their product's price point, value proposition, and how it aligns with the purchasing behavior of each income group.
The choice between targeting consumers with high incomes versus medium incomes involves assessing the product offering and its fit with the respective consumer's willingness and ability to purchase.
If the product is a high-end laundry machine, it may be more suitable for high-income consumers who value premium features and have the disposable income to afford the luxury.
On the other hand, if the product offers good functionality at a reasonable price, then targeting medium income consumers might be the better strategy, as it aligns with their need for value and financial capability.