By Lewis Froud and Connor-Jay Abery
What Is Demand?
Demand is the quantity of a product that customers want to buy. Of course, we may all want a brand new car, but not be able to afford one . For demand to be meaningful, is has to be backed up by the ability to pay. This is known as EFFECTIVE DEMAND.
What Factors Influence Demand? How?
The price of a product or service is a key influence on the level of demand. For example the price of bottles for actimel depends on the number of factors. Some examples of factors are the price of actimel, the price of rival brands, how easy it is to buy and find and how well promoted is it. For instance if a xbox 360 goes up in price, so will the kinect and so will there demand.
What Is Repeat Purchase? Why is it important?
Demand is a function of getting people to try, then getting them to stay. In other words, product trails and repeat purchase. In most cases, advertising is the method to obtain trail, with the qualities of the product being relied on to achieve a high level of repeat purchase. The weakness of this approach is that advertising is an expensive way to get customers to try; and there is a risk of losing them if the image is not right for repeat purchase.