Managerial Economics and Its Application in Banking Sector a Case of Nmb
INTRODUCTION
DEFINITION OF TERMS
Managerial Economics
Is a branch of economics that applies microeconomic analysis to specific business decisions. It bridges economic theory and economics in practice.
Managerial economics provides a set of tools, techniques, methodologies, guidance and insights that can help in making better and value-adding decisions in business and for analyzing decision problems and developing criteria for choosing the best possible solution to problems.
Consumer Behavior
Is the study of how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants (Kottler, P; Keller, K.L. 2009)
Consumer Behaviour
Referred to as the study of when, why, how, where and what people do or do not buy products. It blends elements from psychology, sociology, social, and anthropology and economics. it attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.
Belch and Belch define Consumer Behaviour as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires.
Demand
Is the willingness and ability to purchase a product. Consumer’s total demand for a product for a product is reflected in the demand curve
Demand Curve
Is a line showing the relationship between the price of a product or factor of production and the quantity demanded per time period. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases.
Shift in demand curve
Is a movement of the demand curve from one position to another (left or right) as a result
DEFINITION OF TERMS
Managerial Economics
Is a branch of economics that applies microeconomic analysis to specific business decisions. It bridges economic theory and economics in practice.
Managerial economics provides a set of tools, techniques, methodologies, guidance and insights that can help in making better and value-adding decisions in business and for analyzing decision problems and developing criteria for choosing the best possible solution to problems.
Consumer Behavior
Is the study of how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants (Kottler, P; Keller, K.L. 2009)
Consumer Behaviour
Referred to as the study of when, why, how, where and what people do or do not buy products. It blends elements from psychology, sociology, social, and anthropology and economics. it attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.
Belch and Belch define Consumer Behaviour as the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires.
Demand
Is the willingness and ability to purchase a product. Consumer’s total demand for a product for a product is reflected in the demand curve
Demand Curve
Is a line showing the relationship between the price of a product or factor of production and the quantity demanded per time period. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases.
Shift in demand curve
Is a movement of the demand curve from one position to another (left or right) as a result
References: Kerin R.A; et al (2004) Marketing the Core Ngowi, H.P. Managerial Economics Handouts 2008 National Microfinance Bank Commercial Department