10 Non-Price Factors Affecting Demand
Posted: Sun Dec 22, 2024 6:19 am
When residents of a country or region start earning more on average, a fair wage system is established, etc., their interest in the products offered increases. At the same time, business owners need to remember that fluctuations in demand for individual product groups may vary and sometimes be directed in the opposite direction. In particular, the volume of sales on the secondary market decreases, since with increasing income, consumers prefer modern, high-quality products. Accordingly, all products are divided into lower, normal and higher categories.
Tastes and fashion
The desire of buyers to buy the latest usa phone list models is actively fueled by advertising and publications on the Internet. As a result, they become more popular; in turn, outdated models no longer attract the audience.
The influence of fashion is especially noticeable in the clothing and accessories market. When choosing things, people are guided by the advice of authoritative persons and the preferences of celebrities. Similar trends are observed in other areas. For example, new trends periodically appear in interior design. Thus, in the second half of the 2010s, Scandinavian minimalism was popular in decorating apartments.
At the same time, changes in consumer tastes can be spontaneous, and then it is not always possible to foresee them in advance. Take, for example, pop-its, which became trendy in 2021, but a year later lost their place in the children's toy market to Hagi Vagi.
Number of consumers
The population size can change as a result of both an increase in the birth rate or a decrease in the death rate, as well as migration. Thus, the number of people permanently residing in the largest cities is steadily growing, and demand increases as a result.
Number of consumers
Source: shutterstock.com
When a company enters the international market, it is possible to significantly increase the number of users of the product, but for this it must be characterized by high quality and versatility. For example, selling clothing in a national style makes sense only in specific regions where the corresponding cultural traditions have become stronger.
Prices for substitutes
Nowadays, any product can be replaced with a similar functionality. The market for certain categories (TVs, cars, etc.) is dominated by several competing brands. The rise in prices for a particular model encourages consumers to choose a budget option. This applies to products with similar characteristics. When it comes to complex devices or electronics, consumers pay special attention to their specific functions.
Consumer Expectations
Consumer expectations related to changes in income or price over time have a major impact on demand. Thus, with a high probability of natural disasters, demand for essential goods increases, and an expected drop in prices for the product of interest forces the consumer to postpone the purchase.
The occurrence of this factor is extremely difficult to predict during business planning, and most often it is not taken into account.
Availability of complementary products
For some types of products, it is necessary to purchase additional components, which makes them easier to use or is even mandatory.
As a rule, this is typical for complex devices. Thus, for professional photography, in addition to the camera itself, a memory card is required, and to avoid inconveniences and get a better result, a tripod, additional lenses and a flash are needed. At the same time, an ordinary consumer can get by with a less complex device and save significantly on accessories. When add-ons become sharply more expensive, demand for individual items or even categories of goods begins to fall.
Seasonality
In this case, it is not difficult for any market participant to estimate the future demand at a certain point. Sometimes, ski purchases are postponed until summer, in the hope that it will be more profitable. And yet, although such off-season sales do happen, the peak of demand occurs during the New Year holidays, when many people want to relax in the fresh air.
Political factors
They not only shape customer expectations, but also determine economic factors that influence supply and demand, such as the use of logistics or purchasing prices.
Cultural traditions
Under the influence of this factor, sales of specific goods grow at one time or another. Thus, on the eve of March 8, flowers become a popular product, and before February 23, shaving foam.
However, the increase in demand will be significant only for territories with established cultural traditions.
Tastes and fashion
The desire of buyers to buy the latest usa phone list models is actively fueled by advertising and publications on the Internet. As a result, they become more popular; in turn, outdated models no longer attract the audience.
The influence of fashion is especially noticeable in the clothing and accessories market. When choosing things, people are guided by the advice of authoritative persons and the preferences of celebrities. Similar trends are observed in other areas. For example, new trends periodically appear in interior design. Thus, in the second half of the 2010s, Scandinavian minimalism was popular in decorating apartments.
At the same time, changes in consumer tastes can be spontaneous, and then it is not always possible to foresee them in advance. Take, for example, pop-its, which became trendy in 2021, but a year later lost their place in the children's toy market to Hagi Vagi.
Number of consumers
The population size can change as a result of both an increase in the birth rate or a decrease in the death rate, as well as migration. Thus, the number of people permanently residing in the largest cities is steadily growing, and demand increases as a result.
Number of consumers
Source: shutterstock.com
When a company enters the international market, it is possible to significantly increase the number of users of the product, but for this it must be characterized by high quality and versatility. For example, selling clothing in a national style makes sense only in specific regions where the corresponding cultural traditions have become stronger.
Prices for substitutes
Nowadays, any product can be replaced with a similar functionality. The market for certain categories (TVs, cars, etc.) is dominated by several competing brands. The rise in prices for a particular model encourages consumers to choose a budget option. This applies to products with similar characteristics. When it comes to complex devices or electronics, consumers pay special attention to their specific functions.
Consumer Expectations
Consumer expectations related to changes in income or price over time have a major impact on demand. Thus, with a high probability of natural disasters, demand for essential goods increases, and an expected drop in prices for the product of interest forces the consumer to postpone the purchase.
The occurrence of this factor is extremely difficult to predict during business planning, and most often it is not taken into account.
Availability of complementary products
For some types of products, it is necessary to purchase additional components, which makes them easier to use or is even mandatory.
As a rule, this is typical for complex devices. Thus, for professional photography, in addition to the camera itself, a memory card is required, and to avoid inconveniences and get a better result, a tripod, additional lenses and a flash are needed. At the same time, an ordinary consumer can get by with a less complex device and save significantly on accessories. When add-ons become sharply more expensive, demand for individual items or even categories of goods begins to fall.
Seasonality
In this case, it is not difficult for any market participant to estimate the future demand at a certain point. Sometimes, ski purchases are postponed until summer, in the hope that it will be more profitable. And yet, although such off-season sales do happen, the peak of demand occurs during the New Year holidays, when many people want to relax in the fresh air.
Political factors
They not only shape customer expectations, but also determine economic factors that influence supply and demand, such as the use of logistics or purchasing prices.
Cultural traditions
Under the influence of this factor, sales of specific goods grow at one time or another. Thus, on the eve of March 8, flowers become a popular product, and before February 23, shaving foam.
However, the increase in demand will be significant only for territories with established cultural traditions.