Business volumes going down, less surplus, bottom line getting hit, banks giving less credit, consumers buying less..all these and more are basically the symptoms of a recession. When the economy is hit by a recession there is a high chance that consumer psychology and behavior will also change. The consumers when they face such a situation will no longer spend only on the basis of their desire to consume but instead they will try to live within their means.
The consumers during this stage would be highly demanding and would be looking for the best bargains. The companies would be forced to bring down the prices or offer discounts and bring down the purchase points. The propensity to consume will be less and the propensity to save will be more. Given below is a link which is a video of an interview with Prof. John Quelch, Professor, Harvard Business School who explains consumer psychology in recession.
Consumer Psychology in Recession
