It's all about Saving and Gaining

During hard times like these, consumers will try their best to save as much as they can so that they can be prepared in case anything happened. Producers will try their best to reduce their costs so that they can begin to earn profits, and try to increase productivity. Below are tips to help both consumers and producers to save and increase productivity respectively.

How to save, AS A CONSUMER:

I personally enjoy these luxurious goods, like having my meals at restaurants and buying goods that are of quality, like over at supermarkets where you have the 'Japanese' section, and products there usually cost about $3 and above. But there are also so many other things that I want, so what do I do? I will properly allocate my resources, and watch how I spend my money. I do not think I need these luxurious goods, and thus will turn to more necessities for the time being, since I am tight on money. The important thing is, do not spend unnecessarily. Now is not the best time to be thinking, "Should I have a Gucci, or a Prada, or both?" In fact, it's the time when you are supposed to keep your budget even lower, and try to spend as little as before.

I often look out for discounts at stores and try to get my hands on those before other people do, even value meals that cost cheaper, like the McDonald's value meals. Remember, being a consumer is all about saving, not being thrifty at this point. Keep a little account book on how much you have spent per day just to keep track (I have a friend who did that), and not have to deflate your wallet in a matter of seconds.

You could even keep some of the 'leftover' money into the piggybank of yours just to make yourself feel happier about how much you are going to save in the end.

How to increase productivity, AS A PRODUCER:

Producers are an entirely different case. They need to provide for us, consumers, so we get to enjoy the benefits of the goods and services.

However, in an economic recession, they also suffer just like us. Thus, they need to be able to know how to increase their productivity and make sure they would not lose out to other companies. Competition really allows them to grow much stronger and in productivity, and makes them strive harder to produce better quality products for consumers. This can help earn customers to their company, and their business can boom.

They can, of course, put up more advertisements and perhaps get their employees to spread the message to their friends and relatives, and from their friends and relatives, it can spread to many other people. Bigger companies will also make use of internal economies of scale to increase their productivity, such as marketing economies. This allows them to buy their materials in bulk, and buying in bulk can therefore get lower prices. Advertising costs can be reduced this way as these costs can be spread over a larger number of units (products). They can produce more, and then save some money for future investments.

For companies that have inelastic goods (necessities, the basic goods like rice), they should focus more on being able to successfully sell their goods. They can do this as their goods are fundamental goods, they are goods that most consumers should have and that they can earn a lot by successful advertising. For those which have elastic goods, they will have to try to reduce their prices so that they can sell to consumers, to allow their revenue to go up.

SOURCES: From myself (consumers part, real life stuff!), Economics for GCSE (Alain Anderton) and asking mom for a little help.

- Kai En, 5W