DEMAND SHIFTS FOR DIFFERENT CATEGORIES OF GOODS AND SERVICES:

certain economic elements can shift these curves of supply and demand, and cause you to reassess your business strategy or goals. In particular, there are specific factors that can force a shift in a demand curve.

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Income

Demand shifts when your customers don't have income to purchase your products or services, and businesses making essentials aren't immune when income dips. People do without necessities during economic crunches, but adapting your production to offset reduced demand allows you to continue production and provide services.

 

Prices

Prices influence the demand for your products and services, but reducing your prices to rock bottom doesn't always mean sales. Customers love to find bargains, but buyers must perceive the product has value and is worth buying. Competitors might undercut your product by introducing similar, but inferior, products at lower prices and this also shifts the demand for goods or services for both companies when consumers can't tell the difference between the original and the cheaper, but inferior, imitation.

 

Preferences and Expectations

It's hard to judge what your customers will enjoy from the products and services you provide. Fads and styles change and, unless your company follows the trends, the demand shift may catch you investing in products or services that once sold well but customers now find out of date or unnecessary. Market and insight surveys help you evaluate demand shifts and adjust your production and services to reach buyers at peak interest periods. Your competition also influences the demand shift when firms make similar items and saturate the market. This helps meet the current fad, but it also cuts your demand.

 

Population Shifts

Shifts in population create changes in demand. A population shift takes place when people move away from a geographic region, impacting your company sales, and when the population you serve ages or outgrows your product or service.