Every company launches a product with the sole motive of making profits by selling it. However, it all depends on the demand for the product amongst the masses. There is a possibility that either the product will sell well or it will remain on the store racks. In fact, there are also chances that initially there may be high demand for a product but after some time, this demand may diminish. This is why you must read ahead to know more about factors that affect the demand for a particular product.
- The price: You must realize that the price of your product is one of the most important factors for you to keep in mind. This is because every consumer wishes to minimize their pocket pinch. As soon as you launch a new product in the market, your competitors are also on the hunt for ways to be better than you. thus, they may then come up with a similar product at a lower price and lessen the demand for your items. you must have competitive prices and in case you feel that the demand is diminishing, then you can resort to product bundling and price bundling.
- The earning capacity of the consumer: People need to have a steady income in order to be able to spend on your products to satisfy their needs. in case of inflation or lack of job opportunities in your target market, it becomes obvious that the demand for your product is bound to go down. If the masses have increased expenditure, then they are sure to spend only on basic and priority needs. Your product may or may not fall in this category.
- Changes in preferences: The market is very dynamic and the consumers are fickle-minded. It is obvious that they will not stick to the same thing for long until and unless you have an established and leading brand. If you are working in the product development sector, then you must also be aware about the meaning of a product life cycle. This is where the last stage comes into play, that is, bringing innovation into your existing products. That will renew the interest of the masses in your products. This is similar to the way tastes and preferences change in music and art. Nothing is constant.
- Expectations: See, the moment you launch a new product in the market, there are a number of people who flock to try it. This does not mean that you have a base of loyal customers. They are simply trying out your items to see if they are able to get the desired results. They have certain expectations from your products. If they are able to get that, they stay on. Or, they leave your products and move on to try something else. This is why what initially seemed to be a demand, fails to continue further.
These are some factors that affect product demand.