Consumer Confidence Index

By | October 29, 2015

Consumer confidence index in the spring of 2008 fell to the level of spring 2005 and was 44%. In autumn 2007 the figure was 58%, and the spring of 2007 – 76%. This is the sharp decline in the index on record since 2001. Methodology calculating the index of consumer confidence is to assess the views of the middle class on the future financial situation of their families. The project 'lifestyle of the middle class' respondents were given the following question: 'What, in your opinion, change the material situation of your family in one year? ". Are five mutually exclusive response options: 'much worse', 'slightly worse', 'no change', 'a little better 'and' significantly improved '.

Since the set of options is a semantic differential (ie the scale opposite the sense of approval with intermediate values), these options may be quantified. Thus, a variant of 'substantially worse' means a 0% certainty, 'a little worse' – 25% 'no change' – 50% 'slightly better' – 75% 'much better' – 100%. Weighted average of these quantitative assessments and reflects consumer confidence index. Consumers are driving the economy, giving impetus to two-thirds of all economic activity in Russia. The consumption depends heavily on what they think consumers of tomorrow, ie, on consumer confidence.

Of consumer confidence depends, whether they will increase its debt or reduce spending to repay debt. Measurement of consumer confidence plays an important role when making decisions about inventory levels, recruitment, development budgets for promotion. With a decrease in consumer confidence are beginning to be excluded from the structure of consumption surplus that they could afford more optimistic of times. The first reduction related discretionary spending, ie, goods purchased from a relative excess of funds. Laundry facilities are replaced by self-laundry, restaurants – home food, taxi – by public transport. First, reduced consumption and then excluded 'extra' product categories entirely. Accordingly, the more your product relates to discretionary categories consumption, the closer you must watch the mood of the audience.

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