Factors of demand: Demand
Price
The extent of demand change depends on the price Demand - a measure of the consumer’s desire to purchase
elasticity of demand. products and their willingness to pay the specific price for
Changes in the price of substitutes and compliments them. structure
The cheaper the product the higher the demand for a
Election
product and its complements. P Political Government influence
results
The higher the price of an original the higher the demand Economy’s health and its
for an alternative. E Economic Inflation rates
impact on a business.
Changes in consumer incomes Cultural and demographic
Population
S Social aspects of the external
growth
Fluctuation in disposable income (earnings post tax) will environment.
affect consumers’ ability to buy. Incorporates innovation
and technological changes Advancements
As essentials increase (discretionary income decreases) and T Technological
that could affect a market in digital tech
money is less likely to be spent on non-essential products
position.
(watches, clothes etc.)
Laws &
Fashion, taste and preferences regulations at
Involves the regulatory
local, regional
Trends and demand will fluctuate. L Legal environment in which a
and
business operates.
Tastes and preferences are more predictable – certain things international
will always be in demand. levels
Ecological and
Advertising and branding Environment
E environmental aspects that Climate change
Create demand as it ensures consumers are aware of the Basic Lawalof Demand – demand
could impact a varies
market.inversely to price.
product.
Substitute - a product that a customer can use in place of
Demographics
another product.
Adapting to meet customer needs based on market gaps.
Compliments - a product that is often bought with another
Seasonality - Sales affected by weather / time of year.
product.
Price
The extent of demand change depends on the price Demand - a measure of the consumer’s desire to purchase
elasticity of demand. products and their willingness to pay the specific price for
Changes in the price of substitutes and compliments them. structure
The cheaper the product the higher the demand for a
Election
product and its complements. P Political Government influence
results
The higher the price of an original the higher the demand Economy’s health and its
for an alternative. E Economic Inflation rates
impact on a business.
Changes in consumer incomes Cultural and demographic
Population
S Social aspects of the external
growth
Fluctuation in disposable income (earnings post tax) will environment.
affect consumers’ ability to buy. Incorporates innovation
and technological changes Advancements
As essentials increase (discretionary income decreases) and T Technological
that could affect a market in digital tech
money is less likely to be spent on non-essential products
position.
(watches, clothes etc.)
Laws &
Fashion, taste and preferences regulations at
Involves the regulatory
local, regional
Trends and demand will fluctuate. L Legal environment in which a
and
business operates.
Tastes and preferences are more predictable – certain things international
will always be in demand. levels
Ecological and
Advertising and branding Environment
E environmental aspects that Climate change
Create demand as it ensures consumers are aware of the Basic Lawalof Demand – demand
could impact a varies
market.inversely to price.
product.
Substitute - a product that a customer can use in place of
Demographics
another product.
Adapting to meet customer needs based on market gaps.
Compliments - a product that is often bought with another
Seasonality - Sales affected by weather / time of year.
product.
