Where there is demand there is a supplier and sometimes suppliers can create demand. There are many factors that influence demand for goods and services in the market place, some are the result of natural demand born of basic necessity or perceived needs, however firms can create desire for a product through the study and manipulation of the forces in demand and supply.

Every firm which provides goods or services to fee paying customers must, by its very nature, charge a price for that good or service, to pay for its costs, have retained profits for investments and to keep its shareholders happy.

The demand for a firm’s product is determined by various factors, some of these factors are in the hand of the firm, such as price, advertising, packaging, brand name, and quality. One of the firm’s influences on the demand for a product is price; the Law of Demand states that when the price of a good rises, the level of demand for that good will fall

Ø as less people are now able to buy the good based on their income

Ø as more people are now able to buy the good based on their income

titute goods which now may appear more attractive given their relative price

Ceteris paribus - other things being equal

Every producer tries to out guess the market, some with better research, and results, than others. As they make predictions about sales. They adjust their production, therefore changing market supply. The firm has influence over Planned advertising campaigns, these can increase the demand for goods and services, and advertising can create wants. Firms can advertise in a lot of ways, such as magazines, posters, billboards and even carrier bags, but one of the main forms of advertising is television.In the modern market place, packaging is very influential in the demand for goods. One example of this is within the entertainment industry – CD quality pirates are available to anyone with a computer and a CD burner and retailers are finding thefts of empty cases (packaging) on the increase because the casing is now the most desirable and most expensive part of many cd based formats. This not only applies to music, but also game consoles as they are very easy to “chip” (modified and cracked to play copied games). A good brand name and can increase the demand for products, take the example of shampoos. Most shampoos use a chemical from ICI, which is the cleaning agent. But because of the brand name and the reputation consumers will often buy the expensive branded products when cheaper ones are available, and in many respects the products are of the same quality.There are some simple assumptions concerning the behaviour of consumers and producers. The theory of consumers demand (how consumers make purchase decisions) assumes that consumers are rational, that is, they want to make the decision that will give them the greatest satisfaction, known as maximising their utility. The optimal choice for a consumer, therefore, is that choice among the available options that will enable him or her to maximise utility. The options available to the consumer are determined by his or her purchasing power (a function of income and access to capital, including credit), and the prices of goods and services available. Given the information available concerning these options, the consumer’s utility-maximising choice will depend

Some topics in this essay:
Law Demand, Inferior GoodsChanges, , increase demand, demand products, income levels, brand name, Ø people, people able buy, demand product, people switch, people able, affect demand, demand price, demand product price, Ø people able, income levels rise, affect demand products,