A-Level AQA Business Revision Unit 1(Part 11) : Understanding Markets
Why is demand important for businesses?
Demand sells. If there is no demand for a good or service, then it will not be a successful product and the business could become insolvent.
If there is high demand, the product will sell in huge quantities, generating large sums of revenue and leading the business to success.
Demand for a product or service can be influenced by:
- Price - Age
- Income - Adverts
- Complimentary goods - Season
- Taste/fashion - Expectations
- Economy - Consumer confidence
- Trends - Substitutes
Businesses usually market on the high street, where they can be seen, customers can enter the shop and test products. The business has a physical presence.
However, with the growing use of technology, and the rise in its use by consumers, businesses have decided to market their products online
Online Marketing - Setting up the business on the internet to sell products
Advantages of this are:
- Products available to the whole world
- 24/7. No closing time
- Start-up and running costs are cheaper than a physical presence
Despite this, there are also some disadvantages:
- Some people like to see/hear/taste/smell the product before they buy
- The website could have many views but few sales
- Website maintenance and crashes reduce selling time
- The internet can be unreliable. Some people might think the business is a scam
