The Economic Impact On The Fast Food Industry

3693 words - 15 pages

Fast Food and Consumer Behavior


Marketing can impact the economy in one or two ways. First, marketing has the potential to increase the demand for a good or service. Effective marketing campaigns entice people to want/buy a specific good or service. The market demand curve is comprised of individual demand curves for a good. General theory states that consumers will buy less of a product as the price increases. However, marketing can cause the demand for the good or service to become more inelastic, which causes consumers to still buy even when the price increases. This is because strategic marketing plans have a goal to convince consumers ...view middle of the document...

After World War I and II, there was tremendous growth in the American economy and Americans started to embrace the culture of food as a way of life (Borade, 2012). The modern history of the fast food industry began on July 7th, 1912 with the opening of a fast food business called the Automat located in New York (Borade, 2012).
The first Automat was placed in Philadelphia, but the business did reach popularity until it was placed on the streets of Broadway in Manhattan (Borade, 2012). Owners Joseph Horn and Frank Hardart were pleased with the success of the coin operated restaurant, and it remained popular through the roaring 20’s and the late 30’s (Borade, 2012). They popularized the notion of “take-out” food with their catchy slogan, “Less work for mother.” During this time, woman were purposed as housewives and mother, therefore this slogan was significant and held substantial weight in the average American household. Today, the U.S boasts of having the largest fast food industry in the world, and more than 100 countries have American owned fast food restaurants (Tek, 2013).
Fast food is in high demand for many Americans. Michael K. Brown, the author of Whitewashing Race: The Myth of a Color-Blind Society, wrote that “Americans currently spend more money on fast food than on movies, books, magazines, newspapers, videos, and music combined.” In 1970, Americans spent six billion dollars on fast food, and 110 billion dollars in 2001 (Schlosser, 2000). This shows that it only took thirty years for the fast food industry to grow almost twenty times. Almost ten years later in 2013, Americans spent 191 billion dollars on consuming fast food (Statistics, n.d). The National Bureau of Economic Research reports that one-fourth of the U.S population visits a fast food restaurant every day. They also report that 84 percent of the American population will visit a fast-food restaurant once a week and only 28 percent reported to never consume.
Consumer Behavior
These alarming statistics lead one to wonder how the fast food industry is shifting demand curves at such a fast and consistent pace. How do we continue to consume massive amounts of the very foods that are responsible for the largest amounts of deaths in America due to obesity and diabetes? Some argue that marketing is the primary reason, while others argue that consumers are making conscious decisions to consume based on the personal desire for fast food. Although I believe that both of those arguments hold a large amount of validity, there is so much complexity to the fast food industry as a whole that many of us overlook. Whether one places fault on the advertising industry or on the consumer under the concept of homo economicus which will be discussed later on in this paper, one fact should not be ignored. Michael K. Brown explains it best when he states, “Health is fundamental to every aspect of life: without health, a student cannot do well in school; a worker cannot hold...

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