Most marketers comply with laws and regulations. However, noncompliance can scar a firm’s reputation and hurt profits. Most companies fight regulations they consider unjust. The regional Bell operating companies filed lawsuits to protect their turf against competition from long- distance carriers and cable companies, while GTE claimed the deregulation of local phone service was unconstitutional. increases. Inflation would restrict purchases less severely if income were to keep pace with rising prices; but often it does not. Inflation increases marketers’ costs, such as expenditures for wages and raw materials, and the resultant higher prices may, therefore, negatively affect sales.
Inflation makes consumers conscious of prices, especially during periods of high inflation. This influence can lead to three possible outcomes, all important to marketers: (1) consumers can elect to buy now, in the belief that prices will be higher later (an argument that automobile dealers often cite in their commercial messages); (2) they can decide to alter their purchasing patterns; or (3) they can postpone certain purchases.
Over the past 20 years, the United States’ rate of inflation has slid from 13.6 percent in 1980 to below 3 percent in 2002. Many economists predict that similarly low levels will continue throughout this decade. At these low levels, inflation may not affect the economy as strongly in the future as it has in the past.