By Brandon Froud
What is Demand?
Demand is the quantity of a product that customers want to buy. For demand to be meaningful, it has to be backed up buy the ability to pay. This is known as Effective Demand. In the vast majority of cases, higher the price is the push for demand goes down. For example a price increase for pepsi would cut their demand.
What Factors influence demand? How?
The price of a productor service is a key influence on the level of demand. For example demand for bottles such as Actimel depends on a number of factors: The price of Actimel, The price of rival brands, such as Yakult,Fasion and taste. If the price went up for Actimel so would their demand.
What is repeat purchase? Why is it so important?
Demand is a function of getting people to try, then getting them to stay. In other words, product trial and REPEAT PURCHASE. In most cases, advertising is the method to obtain trial, with the qualities of the product being relied on to acheive a high level of repeat purchase. The weakness of this approach is that advertising is an expensive way to get customers to try it; and there is a risk of losing them if the image is not right for repeat purchase.