Factors affecting demand
Price of complementary goods
Consumer takes a preferences
Seasonality
Advertising an branding
Demographics
Consumer incomes
Price of substitutes
External shocks
If the price of cheese decreases the demand for crackers may increase because the complementary good is cheaper.
Sometimes goods are brought in pairs. For example cheese and crackers.
If incomes rise the demand for normal goods will increase. A normal good is any good for which demand increases when income increases, i.e. with a positive income elasticity of demand.
If incomes fall the demand for inferior goods will increase. An inferior good is a good whose demand decreases when consumer income rises.
If there is successful advertising and branding the demand for certain goods and services may go up.
A stronger brand will result in brand loyalty which means the demand for goods will increse through repeat purchassing.
These are factors beyond the control of a business such as arrival of competitors, government legislation, economic climate and social factors
This changes the demand for goods at differnt times of the year for example ice cream insummer or coats in winter.
In dynamic markets there is lots of competition which affect the demand as there are many subsitutes.
For example is the price of Pepsi increases the demand will decrease as consumers will swap to other brands like Coca cola which will increase the demand for their goods.
In dynamic markets tastes and social trends are always changing. As a result thte demand for goods fluctuates
An examples of this is, fidget spinners. The demand was really high over a short period of time because they were a social trend however the demand has now decreased.
In coastal areas the population is largely made up of elderly people. This means the demand for walking sticks would be higher there however the demand for technology may be lower.
Another social trend is veganism, recenty the demand for these goods have increased rapidly.
Brexit can be classed as an external shock, the uncertainty is causing the demand fo luxury goods like holidays to decrease.
A good business will make sure it understands and can predict the seasonal variations then can plan to cope with it.
Demographics break down population data into catagorys like age, gender and ethnicity.