Consumer Sentiment

Posted in Marketing and Strategy Terms, Total Reads: 500

Definition: Consumer Sentiment

Consumer Sentiment is the confidence which consumer has about the national economy and financial health of the consumer. Consumer confidence is what he thinks about current national economy with respect to past and his confidence to earn steady income in current economic conditions. If consumer is confident and has positive sentiment it indicates that economy is progressing and consumers will spend more income rather than saving their money. This gives an opportunity for marketers to capture the consumer base due to their high willingness to buy.

This consumer sentiment is measured in two forms by consumer confidence index (CCI) and consumer sentiment index (MCSI). Consumer sentiment index is measured by University of Michigan in United States and is published on a monthly basis. MCSI is generally measured by conducting a series of telephonic interviews with group of people within country. The questions asked in telephonic interviews are related to current national economy with respect to past year and also future expectations of national economy.

Also questions are related to personal financial condition over a period of past one to five years and the conditions of current employment. Retailers, marketers, manufacturing units, government and various other organisations monitor consumer sentiment index every month. They ignore if monthly increase or decrease in consumer sentiment index is between 5%. If CSI exceeds 5% it serves as an opportunity for manufacturers as people are willing to spend money. Also if CSI decreases by more than 5% then government has to take some steps to increase confidence in customers if this negative trend is observed for several months. Consumer sentiment index is very important parameter to assess current economy from perspective of customers.

Hence, this concludes the definition of Consumer Sentiment along with its overview.


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