Consumers only have so much to spend, especially when they go to the grocery store. Their wallet has a limited amount of cash in it notionally (includes credit cards and debit...but there exists a perceived "budget" above which consumers just don't wanna spend).
So if, say, Joe Consumer spends $126 each week at the grocery store, and Procter and Gamble wins $42 of that weekly spend via the 87 products they have on the shelves, then PG's share of wallet is 42/126, and they'll seek to up that number.
The notion is that the spend is more or less fixed, in that grocery store expenditures aren't really going up; they're just a zero sum game with the big players trading around market shares, which then lead to profitability and happy shareholders. So they fight for that share and the extra earnings per share in their stock price.
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Finance: What is a Budget?43 Views
Finance a la shmoop what is a budget? that's that thing you throw right out [Woman throws budget out the window]
the window just before you start doing all your Christmas shopping
right but generally it's a plan that lets you see where your money will be
spent if you have a personal budget well you'll be able to decide ahead of time [Personal budget example]
how much money you'll spend on clothes, food, megaphones to annoy and anger your
neighbors and you know whatever floats your boat if you own a company well
you'll probably have much more complicated budget for things like
advertising and lawyer fees either way the plan helps you make sure that you
have enough moolah for everything you need and maybe some leftover for stuff
you want.....Joan wants to control her money so she decides to set up a budget for [Joan setting up a budget on a laptop]
next month she makes a thousand bucks from her summer job and well here's what
her budget looks like.....
Now Joan knows exactly where every penny is gonna go she's not [Joan driving a car]
gonna be caught off guard by any surprise expenses she's not gonna spend
$200 on safecracking equipment and then realize she doesn't have enough left [Joan stood beside a vault of gold bars]
to pay her phone bill although if she does get hit with some unexpected
expenses well hopefully yeah she can just pawn some of those exotic vases she
took from the Peterson place [Joan holding a vase]
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What is a Budget Constraint? Consumers have a panoply of choices in goods and services. The total accumulation of goods and services that a consume...