Burger King

Burger King Many economic, sociological, demographic and cultural factors affect consumption patterns for food and for specific food products. Demand factors for any product, other than price of this product, are real income, prices of related goods and tastes, and the total gross country demand for a specific good is also dependant on total number of buyers and consumer expectations relating to the future, changes in which will lead to increasing consumption of one type of goods and decreasing purchasing of others.

For a normal good demand increases with the real income of purchasers rising and normal good are price sensitive. Changes in the price of the product will lead to increasing or decreasing demand per capita of this product, but changes in the policy and other factors influencing tastes can lead to increasing or decreasing demand for the product at any given price.

Fast food services are not normal good completely and thus increases in total income should not directly lead to increases in consumption of this good as people can become more health aware and be able to afford healthier foods, on the other hand, increasing per capita demand may be due to more hours worked and thus less time for proper meal and more demand for fast food restaurants.

Some estimates prove that a 10% increase in real income per capita will cause a 10% demand increase in full services and 3,2% demand increase for fast food restaurant services The price of the food is mostly affected by the cost of the inputs used to produce the specific products and ability of the company to employ benefits of economies of scale, which is usually the case for fast food companies.

This also implies that increasing income can have both positive and negative impact on demand for these services, as increasing income will translate to some point into increasing number of units bought and also number of purchasers wishing to buy these products, but on the other hand it will be associated with higher demanded by workers wages which can lead to higher product prices if this affect is not offset by efficient corporate management.

Economic factors that affect the mentioned above demand patterns include overall employment level in the country as growing employment rate not differentiated for break down of the industries in which the biggest employment growth has occurred, will lead to higher number of people having lowest income which is necessary for purchasing at least one unit of fast food product as it is not a luxury product and increasing employment level can lead to total demand curve shift for fast food services.

Also, income per capita growth will lead to higher consumption of fast food services as more funds will be available to purchasers to enjoy fast food restaurants.

The third economic indicator directly influencing the price of the fast food restaurant services is the minimal wage as the majority of the wages paid within this industry are minimal and growth of minimal wage will lead to growth of the costs to produce fast food services and can be translated into higher prices of the product which shall lead to lower consumption rates.

Productivity, technology growth or changes in tastes will lead to total output growth and GDP growth within the country which can be translated into higher real income per capita with higher consumption of all the products.

Higher government interest rate can increase the total marginal propensity to save by the residents as it will be favorable for them to save money, while it will not be as cheap for businessmen to borrow money and thus it can decrease consumption of the people who would be rather off saving money and can decrease the total employment as investors will be reluctant to expand their production levels.

Total country economic development leading to currency ratio to other global currencies can affect consumer attitudes towards their future and also will translate into present consumption patterns. Negative future expectations will lead to higher saving rates and thus lower present consumption, while positive future expectations can lead to already today higher consumption due to higher.